THE government has asked trading firms and food processors to boost inventories of grains and oilseeds as a possible second wave of coronavirus cases and worsening infection rates elsewhere raise concerns about global supply lines.

Both State and private grain traders as well as food producers were urged to procure higher volumes of soybeans, soyoil and corn during calls with the Ministry of Commerce in recent days, Reuters quoted three trade sources as saying Sunday.

“There is a possibility of a breakdown in supply pipelines due to the coronavirus infections. For example, a port of origin or destination might shut down,” said a senior trader at one of China’s leading food processors, which was on a call last week with authorities to discuss purchases.

“They have advised us to increase stocks, keep supplies higher than we usually have. Things are not looking good in Brazil,” he added, referring to China’s main supplier of soybeans and a key meat exporter where the number of coronavirus cases has surpassed those in Spain and Italy.

“One of the main concerns is how the epidemic in South America might impact supplies (of beans) to China,” a second source said.

Brazilian shipments of soybeans were delayed in March and April due to a combination of heavy rains and reduced manpower as coronavirus containment measures took effect, leading to a plunge in Chinese soy inventories to record lows.

State-owned agriculture conglomerate COFCO and grain stockpiler Sinograin have been stepping up purchases of U.S. soybeans and corn in recent weeks.

Chinese importers bought at least four cargoes, or about 240,000 tons, of U.S. soybeans last week for shipment beginning in July, two traders said.

China has also increased its allocations of crop import quotas to major grain buyers, paving the way for further potential purchases.(SD-Agencies)