Buffer Stock Scheme

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Buffer Stock Scheme

A practice in which a large investor, especially a government, buys large quantities of commodities during periods of high supply and stores them so they do not trade or circulate. The investor then sells them when supply is low. This is done to stabilize the price by roughly equalizing supply regardless of other factors. This practice was first used in China more than 2,600 years ago. It is most common with agricultural products. The usefulness of the scheme is controversial.
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But NFA earlier bared a shortage in their buffer stocks which prompted them to import additional rice supply.
He said the NFA Council made the right decision to import 250,000 metric tons of rice to increase the country's buffer stocks, a move which Palace supported.
Grace Poe said it was obvious that Aquino failed in his job that led to near-zero buffer stocks of the food staple and caused a spike in prices of commercial rice.
The National Food Authority (NFA) will continue to build up its food security buffer stocks from domestic palay procurement and rice importation, if necessary, under a regime where quantitative restriction (QR) on rice has been lifted.
Hassen said that production levels were planned in co-operation with professional organizations on key consumer products as well as in stocks, underlining that the ministry has taken all necessary measures and established buffer stocks.
Speaking to Khaleej Times, Al Ghurair felt that it is vital for the GCC to encourage public-private partnership in building up strategic food reserves and buffer stocks as per capita food consumption in the region is forecast to reach 971.
Grain buffer stocks double the amount needed as food prices rise
Essa Abdulla Al Ghurair, Chairman of Al Ghurair Resources, said, his company sees strong growth in food grain business, moving forward, as the Gulf countries are developing buffer stocks as part of their food security programme.
Meat market analysts these days warn against relying on coldstore stock statistics as forward indicators of supply and price, partly because the role of buffer stocks in the distribution system has been downgraded by processors' and retailers' attempts to adopt the `just in time' principle right along the production and marketing chain.
Under the new system, the stock policy will be to concentrate buffer stock at the export warehouse near the production factories, keeping only small buffer stocks at the sales companies' warehouses.
In the short run, however, weather still is an important facto], as is the fact that INRO buffer stocks are now exhausted.
Section 4 presents estimates of expected recurrent costs involved by different sizes of buffer stocks.