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BEIJING (Commodity Online) : World’s largest forex reserves holder, China should use its huge foreign exchange reserves to expand investment in the agricultural sector overseas, according to a researcher with country’s Research Center For Rural Economy.
In an essay published in the state-owned Farmer's Daily, Chen Jie said this will help to increase domestic market supply.
China's foreign exchange reserves to $3.04 trillion as of the end of March, with a substantial portion invested in U.S. Treasurys.
China should build grain production bases abroad, especially in South America, Africa and some neighbouring countries with great potential to increase grain production, Chen added.
Chinese agricultural companies are eager to tap overseas resources as domestic demand is rising quickly and domestic grain and edible oil production is approaching full capacity due to rapid urbanization.
Both the Chinese government and marketers also want to insulate prices from volatility in major markets such as the Chicago Board of Trade, and controlling upstream resources including land and crop selection would be the best way.
China, the world's largest importer of soybeans and palm oil, is attempting to maintain a grain self-sufficiency rate above 95%.
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Source: Commodity Online