China drafts new law on grains reserves amid food security concerns

BEIJING, Dec 3 (Reuters) - China published a new draft law on management of its grain reserves on Thursday to include oversight of stocks in regions and provinces as it seeks to bolster its food security.

Previous rules governing grain reserves only applied to its central state stockpiles but Beijing has this year heightened its focus on risks to food supply.

The law was drawn up as “new situations and questions have risen regarding grains reserves security administration, posing severe challenges to China’s grains stockpile security,” the National Development and Reform Commission said in a statement on its website.

China said in May that it would draft and carry out both near and long term plans on ensuring food security amid the global coronavirus pandemic.

The pandemic has disrupted agriculture supply chains worldwide, threatening to trigger a potential food crisis and as the virus continues to spread across the world.

Local governments should build up reserves of processed grains and oils of an appropriate scale in central areas of medium-large cities and regions with markets that are prone to volatility, the state planner said.

“The state’s need to secure grains output and its capability to control domestic supplies has become more urgent,” said Meng Jinhui, senior analyst with Shengda Futures.

The new law stipulates how the reserve volumes should be set and the products to be included, as well as when the grains can be released.

Reserves should only be used in cases of obvious grains shortage, significant price moves, major natural disasters or other emergencies.

The document also encourages urban and rural residents to stockpile grains in a reasonable way.

Reporting by Hallie Gu and Dominique Patton; Editing by Simon Cameron-Moore