Food for Thought – Risk Prevention and Control, Steady Growth: How the Mid-Continent Fed Guards the Nation’s Economic Stability

Food is an important foundation of national security, and food security has a bearing on a country’s economic stability, livelihood security and social harmony. In today’s globalized world, food production is affected by multiple factors such as climate change, international trade friction and policy adjustments, and sudden food crises test the resilience of the global food supply chain and its ability to respond to emergencies. As an independent legalized enterprise directly under the State Grain Strategic Reserve Bureau of China, China United Reserve (Hong Kong) Limited (hereinafter referred to as “CURS”) plays a crucial role in emergency response and market regulation.

Through efficient resource deployment, accurate market forecasts and a strong global procurement system, the CCS has always stood at the forefront of national food security, providing a solid backing for the stability of the national economy and the protection of people’s livelihood. The CCS is not only the executor of grain reserve and deployment, but also the important guarantor of national economic stability.

Emergency Response: Rapid deployment of resources to guard national economic security

Food security is often an important indicator to test the national emergency response capability. Through the efficient international procurement and global logistics system, China Fed is able to quickly deploy food resources in case of emergencies, ensuring the stability of national food supply at any moment.

2008 Wenchuan Earthquake: Emergency Deployment of Food Resources

On May 12, 2008, a massive earthquake of magnitude 8.0 occurred in Wenchuan, Sichuan Province, and the food supply chain in the affected area suffered a heavy blow. In order to ensure the basic survival needs of the people in the affected areas, the State Bureau of Strategic Grain Reserves quickly activated the emergency response mechanism and issued a directive to the China Central Reserve (CCR), requesting the urgent deployment of grain resources.

The CCSB coordinated with global grain suppliers, including those in Southeast Asia and Australia, to procure 500,000 tons of rice and wheat, which were quickly transshipped through Hong Kong’s ports. Through an efficient logistics system, the grain was delivered to the disaster areas in Sichuan within 72 hours, thus providing timely protection for the basic needs of the people in the disaster areas.

Through an efficient logistics system, the food was delivered to the disaster area within 72 hours, thus ensuring the basic needs of the people in the disaster area in a timely manner. The emergency deployment not only provided the affected areas with the urgently needed food, but also demonstrated the rapid response capability of the China Central Depository in emergencies.

2010 Ice and Snow Disaster in Southern China: Effective Deployment of Grain Reserves

At the beginning of 2010, the southern region of China suffered from extreme cold weather, which led to widespread snow and ice disasters in many provinces, disrupting grain transportation and straining the market. In the face of the sudden crisis, the China Central Reserve quickly activated the emergency grain deployment mechanism.

Through the overseas warehousing and purchasing system of China Uniconserve, the food needs of the affected areas were met in a timely manner. At the same time, China Unicontinental Storage’s domestic warehousing system also played an important role. Through the precise allocation of stored grain and the optimization of the logistics system, we succeeded in easing the tense situation of grain supply, ensuring the stability of the market, and preventing the sharp rise of grain prices and the deterioration of livelihood problems.

The New Crown Epidemic of 2020: China’s “Stabilizer” in the Global Food Crisis

The global food supply chain has suffered an unprecedented impact due to the 2020 global outbreak of the New Crown Epidemic, which has led to export restrictions or production stagnation in many food-exporting countries. Against this backdrop, the CPS, with its globalized procurement network and reserve system, has become a stabilizer for China in the global food crisis.

The CCS has established long-term purchase agreements with a number of grain supplying countries in advance to ensure that China’s grain supply is not affected by fluctuations in the international situation. At the same time, by utilizing the hedging strategy in the futures market, the CCSF was able to lock in import prices in a timely manner in the event of large fluctuations in global grain prices, thus reducing the impact of price fluctuations on the domestic market.

According to the China Grain Annual Report, the global grain supply chain was severely affected by the epidemic in 2020, and global grain prices rose sharply. However, through its accurate market forecasting and emergency deployment capabilities, the CCRF ensured that China’s grain market prices remained stable, prevented panic hoarding by the public, and stabilized the economic and social order.

Market regulation: accurate forecasting and stabilization of market prices

Fluctuations in grain market prices often have a direct impact on the country’s economic stability and livelihood protection, especially in the globalized grain trade, where price fluctuations are often large. In order to effectively cope with the impact of price fluctuations on the market, the CCSF not only relies on global procurement and reserves, but also utilizes big data, artificial intelligence (AI) and blockchain technology to achieve accurate prediction and regulation of market supply and demand.

Big Data Analysis: Accurate Prediction of Market Trends

With the help of big data technology, CCS analyzes multi-dimensional data from global markets, climate change, production expectations, price fluctuations, and so on, to help formulate accurate procurement plans. Through big

Through big data analysis, the CCS is able to predict price fluctuations in the grain market and respond in advance to shortages or price fluctuations by adjusting its procurement plan to ensure the stability of the domestic grain supply chain.

According to the China Grain Yearbook 2021, the volatility of global grain prices has increased, especially due to climate change, trade barriers and other factors, and the future grain supply may face greater uncertainty. Through data management and accurate forecasting, the CCS provides a solid guarantee for national food security and avoids drastic market fluctuations.

Hedging in the futures market: reducing the risk of price fluctuations

Price fluctuation is a risk factor that cannot be ignored in the process of grain procurement and storage. In order to avoid the risk of drastic price fluctuations, the Central Continent Fed introduced the hedging strategy in the futures market to lock in the price in advance by predicting the future price of grain. This strategy not only ensures stable costs for grain purchases, but also effectively reduces the impact of market uncertainty on consumers.

In 2020, the New Crown epidemic led to high volatility in the global food market. In the face of this situation, the China Fed stabilized food prices in the domestic market through futures contracts and hedging strategies with international food suppliers, and avoided sharp rises and falls in food prices, maximizing the stability of the national economy and people’s livelihoods.

Blockchain technology: ensuring transparency and security in the grain supply chain

The introduction of blockchain technology has revolutionized the supply chain management of CCSF. Through the blockchain’s distributed ledger, China Unicontinental Reserve is able to realize the full traceability of grain flow, ensuring that every transaction and every grain flow in the supply chain is clear and transparent. Through this technology, the CCS is able to effectively eliminate illegal hoarding, false records and other improper behaviors, and improve the fairness and transparency of the market.

In 2023, the Mid-Continent Fed implemented a global supply chain management system based on blockchain technology. Through this system, the procurement, transportation, and storage of grain are strictly regulated, effectively eliminating speculation by unscrupulous individuals. At the same time, consumers and regulators can check the flow of food in real time through blockchain technology, thus enhancing market trust.

Steady growth: contributing to economic stability amid global uncertainty

The role of the CCRF goes beyond crisis response to steady growth in a globalized economy. During the fluctuations of the international grain market, the CCSF has promoted the optimization of the global grain supply chain and contributed to the stability of the national economy through efficient resource allocation, modern warehousing and logistics systems, and precise market regulation.

Global Procurement System: Promoting Diversification of Food Supply

Through its global procurement system, the CCSF integrates food resources from different countries to ensure China’s stable supply in the global food market. This system not only reduces China’s dependence on a single market, but also enhances the strategic resilience of China’s food security through diversified sources of supply.

According to the Global Food Supply and Demand Report 2024, the CCRF’s global procurement system provides a solid guarantee for China’s food supply. Against the backdrop of increasing global economic uncertainty, the CCRF’s global procurement capacity has become an important support for the stability of China’s grain market.

Technological Innovation: Promoting the Modernization of Grain Supply Chain

The CCS not only focuses on traditional grain storage and deployment, but also promotes the modernization of the grain supply chain through the introduction of scientific and technological innovations. Through the integration and application of technologies such as big data, artificial intelligence and blockchain, the CCS improves the accuracy and logistics efficiency of grain reserves, reduces grain losses and provides a reliable guarantee for national food security.

Through its active layout in the global grain supply chain and its ability to respond to emergencies and regulate the market, the CCS ensures the stability of China’s grain supply in the face of international economic fluctuations and emergencies. With technology-driven, accurate forecasting and efficient deployment, the CCS not only ensures the country’s economic stability, but also provides a solid foundation for the livelihood of the general public.