Chinese government quietly buying arable land abroad as Chinese grain consumption soars

According to Izvestia, the Russian newspaper, and other sources, the Chinese government has commenced buying land abroad, after internal projections showed that the nation’s growth in grain consumption was fast outstripping gains in productivity.

Controversy has been growing over increases in Chinese grain consumption, which some experts have said is the major factor in the increase in global grain prices. Other experts have blamed corn-based ethanol. Critics of the strategy, apparently pinned on a hope of exporting food to China should global supplies become tighter, may fail because of controls placed by nations on export of foods during shortfall periods. Among the nations that have imposed such controls is…China.

China grain consumption background

A change in Chinese meat consumption habits since 1995 is diverting eight billion bushels of grain per year to livestock feed and could empty global grain stocks by September 2010, according to a new study from Biofuels Digest, now available for download here in an expanded version.

The Study, “Meat vs Fuel: Grain use in the U.S. and China, 1995-2008″ concluded that, even if the U.S. ethanol industry were shut down tomorrow, rising Chinese demand for meat, and the ensuing livestock feed demand, will empty global grain stocks as soon as 2011. The report offers gloomy news for policymakers who have hoped to address global food vs. fuel concerns by restraining U.S. ethanol demand.

It’s not food, it’s not fuel, it’s China,” said Jim Lane, editor of Biofuels Digest and author of the report.

The study found that the US produced 349 million tones of corn last year, up from 192 million tones in 1995, but the 157 million tonne increase has not kept pace with rising demand. The US ethanol industry, which has been criticized as the primary cause of grain shortages and rising prices, increased its grain usage by 31 million tonnes during the 12 year period. By contrast, livestock grain demand to supply Chinese meat consumption increased by 199 million tonnes.

The study resolves several questions that had been unanswered in the fuel vs. fuel debate by focusing on rising demand from China as well as the U.S. The report identified that rice, rather than corn or wheat, suffered the largest price increases over the 12-year period, despite the fact that rice is not used for biofuel production. The study also ties falling global grain stocks to corresponding increases in Chinese consumption.

The study determined that China’s meat consumption since 1995 has increased by 112 percent per person to 53 kilograms of meat, per person per year.

“If the Chinese people had consumed the same amount of meat, per person, in 2007 as in 1995, there would have been enough grain left over to support 927 million hungry people with enough grain for an entire year,” said Lane. “The growth rate is so intense that, even if the US ethanol industry were completely shut down tomorrow, increased Chinese demand would soak up the excess grain by 2011.”

The study tracks the meteoric growth in Chinese meat consumption since 1983, a trend spotted early by Worldwatch Institute founder Lester Brown in his prescient 1994 article “Who Will Feed China?”. In 1995, Chinese meat consumption was 25 kilograms per person, and reaching 31 kilograms by 1999, 50 kilograms by 2000, and is 53 kilograms per person today.

“Even with all the growth, Chinese meat consumption is still 45 percent less than the average consumption in the US,” Lane warned. “An additional 277 million tonnes of grain would be needed to support China at parity with the US. That would take 68 million acres to grow. There isn’t that kind of arable land available anywhere is the world, whether we grow grains for renewable energy or not.”

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