SINGAPORE (Reuters) - Towering grain mountains in Asia, already large enough to feed China for eight months, are set to grow even bigger as governments persist in shoring up their safety buffers against hard times.
Haunted by a 2008 food crisis that sparked unrest and panic buying, states will keep piling grain into reserves despite the strain on their finances and storage problems, buoying prices that have been hit by expectations of bumper harvests.
"The most populated countries, especially in Asia, will be very reluctant to see their inventories go down," said Abdolreza Abbassian, senior economist at the United Nation's Food and Agriculture Organization in Rome.
"Lessons learnt during the 90s and 2007-08 have convinced policymakers that the international market is important but it cannot be relied on 100 per cent for food security."
With hoarding the name of the game, Asia's top grain-buying states have accumulated a whopping 100 million tonnes of rice and 90 million tonnes of wheat since a combination of high energy prices, bad weather and growing demand for biofuels sent grain prices soaring in 2008.
"Higher grain stocks reflect the government's priority of having a more-than-sufficient buffer to avoid any shortage and to run its welfare food programmes," said N. R. Bhanumurthy, a professor at the National Institute of Public Finance and Policy in New Delhi. "The entire stock will evaporate if one single crop fails."
India was forced to start exporting grains in 2011 after scenes of wheat and rice rotting in open fields grabbed international headlines. But half-hearted attempts to sell grains have not had much impact on stockpiles.
India's rice stocks at government warehouses stood at 21 million tonnes on Sept. 1, against an official target of 9.8 million tonnes, thanks to four consecutive years of good monsoon rains. It had 38 million tonnes of wheat against a target of 17.1 million tonnes.
In contrast to Asia's giant reserves, the United States - the world's main corn exporter - ended the marketing year in August with its lowest stocks in 16 years.