China is reportedly readying to purchase over 30 million tonnes (more than 66 billion pounds) of crops for stockpiles across the country in an effort to prevent supply chain disruption from the coronavirus outbreak.
The majority of the crops will be purchased from the U.S. as part of a trade deal between Washington and Beijing that was signed earlier this year, Reuters reported.
“The main message from [Beijing] is to secure people’s livelihoods,” a source familiar with the exchange said. “It is a good time to build up reserves, especially when prices of the goods are at quite low levels.”
The crops purchased will include about 10 million tonnes of soybeans, 20 million tonnes of corn and 1 million tonnes of cotton for its state reserves, but it is unclear which parts will come from American farms.
“This is a triple win,” a source told Reuters. “Stockpiles can be released to contain price hikes when needed. It helps [Beijing] fulfill the Sino-U.S. trade deal. And prices are good.”
