context: The state is intervening in the commodity market to ease concerns about surging prices due to global market volatility. Among key commodities, ag products are stressed, with measures to reduce speculation. Food prices, except those of pork, increased in May. Regulators fear trouble among consumers if prices continue to rise.

Global food prices have surged at the fastest rate in history, due to COVID-19’s disruption of food supply chains, higher shipping costs and unfavourable weather. China’s stronger demand for grain and soybeans also adds upward pressure on prices. According to FAO (UN Food and Agriculture Organisation), food prices hit a new peak in May with a 4.8 percent increase since April – the biggest monthly rise in over a decade. Prices of wheat, corn, rice and soybeans have reached an eight-year high.

Despite stressing that grain imports only account for a small portion of total supplies, state has issued policies to rein in food prices. NFSRA (National Food and Strategic Reserves Administration) will launch a special law enforcement campaign in mid-June against interruptions to grain circulation, including speculation, hoarding and misinformation. NDRC (National Development and Reform Commission) and five other authorities jointly announced that they will improve monitoring, forecasting, early warning and controlling of prices of key ag commodities, including corn, wheat, edible oil, pork and vegetables.

Research shows that the global price spike will have a long-term impact, albeit limited, on the domestic corn and soybean markets, stronger than on those of rice and wheat, says Ding Cunzhen 丁存振 Shandong Agricultural University associate professor. Rice and wheat prices, however, may be under great pressure as they are increasingly used as corn and soybean alternatives in animal feed, driving up domestic demand and imports.