War drives Beijing to expedite search for commodities

Chinese government officials have issued orders to prioritize the attainment of energy and commodity supplies following disruptions caused by the Ukraine-Russia war.

Government agencies, including the country’s top economic planning body, the National Development and Reform Commission, have been directed to pressure state buyers to scour commodity markets such as oil and gas, iron ore, wheat, and corn to prevent any potential gaps caused by the conflict.

The authorities made no mention of prices, indicating that costs are not the focus at this time.

Instead, ensuring supply is a high priority for the country as there are concerns about rising global commodity costs’ impact on the Chinese economy.

As a result, Beijing is focusing more on energy and food security after feeling the long-standing effects of the pandemic, which caused severe supply and geopolitical challenges, such as the recent diplomatic spat with Australia.

The authorities did not provide specific guidance on how to secure supplies, leaving the task up to the agencies.

Yesterday, prices for major commodities such as oil, metals, and food continued to increase.

China is entering a period of strong demand for many commodities, and the danger of supply disruptions caused by Russia’s invasion of Ukraine could aggravate price pressure on everything from metals to fertilizers.

Source: Valor Econômico

To read the full original article please read:

https://valor.globo.com/mundo/noticia/2022/03/03/guerra-faz-pequim-acelerar-busca-por-commodities.ghtml

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