On March 7, Zhang Ping, the head of the National Development and Reform Commission, held a press conference at the Great Hall of the People where he announced that China has 100 million metric tons of wheat in reserve. He said this is about enough for an entire year's consumption, and he assured everyone that this big stockpile gives them the ability to stabilize prices.
Mr. Zhang assures everyone that his agency has the ability to keep prices stable. He said that most industrial commodities are in a state where supply exceeds demand. As for grain, he said, "Let me give you a number." The normal amount of grain reserves recommended by the UN's Food and Agriculture Organization is 17-18 percent of a year's consumption. Well, China has 40 percent, more than double the normal stock level.
Forty percent works out to over 200 million metric tons. At a price of $200 per ton, that's over $40 billion-worth of grain sitting in storage.
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