BEIJING (Realist English). China and Kazakhstan have agreed to establish a joint grain trading platform aimed at strengthening food security amid growing instability in global markets following the outbreak of the Iran war, according to the South China Morning Post.
The agreement was reached on May 22 in Astana during a meeting between Kazakh Deputy Minister of Agriculture Yermek Kenzhekhanuly and Liu Huanxin, head of China’s National Food and Strategic Reserves Administration.
The new system will allow both sides to conduct transactions through competitive bidding and direct negotiations. The primary focus will be on soybeans and other oilseed crops.
The initiative reflects Beijing’s effort to reduce dependence on individual suppliers and make food supply chains less vulnerable to global disruptions.
The importance of the project has increased amid warnings from international organizations regarding a possible food crisis. On May 21, the UN Food and Agriculture Organization (FAO) warned of the beginning of a “systemic agrifood shock” that could trigger a severe global food price crisis within the next six to twelve months.
The main cause cited is the continuing blockade of the Strait of Hormuz, which has disrupted exports of fertilizers and other critical agricultural inputs.
China incorporated food security into national legislation in 2023. In recent years, the country’s leadership has increasingly focused on technological modernization of agriculture to compensate for limitations related to arable land and water resources.
Lynn Song, Chief Economist for Greater China at ING, noted that resource constraints have already led to a significant increase in Chinese soybean imports.
According to Kazakh officials, agricultural trade turnover between the two countries increased by nearly 37% last year, reaching $1.97 billion. Kazakhstan’s grain exports rose by 13%, while approximately 3,600 Kazakh companies received authorization to export products to the Chinese market.
The new trading platform will become part of the Belt and Road Initiative and will be modeled on China’s National Internet Grain Trading Platform, which is used for state reserve operations, market stabilization and large-scale commercial trade.
According to Lynn Song, bringing supply and demand together within a unified system would help improve price formation and expand the scale of agricultural trade between the two countries.