China, India growing grain storage

India and China are rapidly expanding grain storage capacity as the nations seek to increase food security and continue down the road toward self-sufficiency.

Commodity production is expanding in both nations thanks to government policies that encourage domestic production while discouraging imports, according to the Foreign Agricultural Service (FAS) of the US Department of Agriculture. India is expected to see record crops of wheat and corn in 2025-26 while rice is expected to stabilize after nine consecutive years of growth. Similarly, China is expected to see domestic corn production increase 1.7%, wheat 1.5% and rice 0.5% in the 2025-26 marketing year.

As production increases, both nations will need more quality storage capacity, with India’s storage shortfall estimated at nearly 50%. A significant amount of existing storage is antiquated or not sufficiently protecting the crops, resulting in high levels of spoilage, including up to one quarter of the harvested crop in India. China’s annual post-harvest food losses range between 289 million to 368 million tonnes, with an average loss rate of about 14%, according to a policy brief from the Henan University of Technology.

Constructing quality, modern storage would help address some of the spoilage issues and help meet domestic demand for both nations, the world’s most populous with more than 1.4 billion people each.

“Minimizing post-harvest and storage losses can help ease the pressure to produce more,” said Rajan Aggarwal, vice president, AGI India, which is part of AGI, a Canada-based global leader in the planning, engineering and manufacturing of equipment solutions and systems for grain, fertilizer, food, feed and seed.

The Indian government has pledged to invest $15 billion with the eventual goal of having enough capacity to store 100% of the nation’s grain production, while China has increased its storage capacity by 34% in the past 10 years.

More production to store

China and India have been increasing crop production, including corn, wheat and soybeans, and the upcoming 2025-26 marketing year is no exception. Both governments are encouraging domestic production to ensure food security and lessen reliance on imports to meet consumers’ needs.

“They’re looking to achieve a greater level of food security, and part of that story is reducing food loss,” said Tanner Ehmke, grains and oilseeds economist with CoBank. “In India, there is a huge amount of waste now, about 25% of their crop. Simply having a more efficient storage system that reduces waste is going to increase their level of food security.”

That’s something India is going to need as it continues to grow in population and incomes rise.

“You have more and more consumers in India demanding more calories and that’s going to require a more strategic approach to their system of food grain management,” Ehmke said.

With only 11% of the world’s total cultivable area, India must feed 18% of the global population, Aggarwal said. Total food grain production is 350 million tonnes and storage capacity is only 145 million tonnes, meaning there is a 47% shortfall in storage, he said.

“The demand for storage silos in India will remain for many years,” Aggarwal said.

India is expected to have a third straight record wheat crop in 2025-26, at 115 million tonnes, based on higher planting and optimal growing conditions, the FAS said. Rice production, after nine consecutive record harvests, is expected to hold steady at 143 million tonnes.

“Rice and wheat are the two focus staple food crops for India’s food security policy cornering the major share of government’s price support allocation and other domestic agriculture support programs,” the FAS said.

Other cereal crops such as corn, millet, sorghum and barley have lower government support, but corn production has been growing in the last two decades on private sector support, the FAS said. A new demand segment has been created by government policy encouraging use of corn and other grains for ethanol, the FAS said. Corn production in 2025-26 is forecast to reach a record 42 million tonnes on higher planting.

Currently, most of India’s grain is stored in conventional warehouses and open-air facilities. These storage methods are prone to losses because of exposure to the elements, pests and other environmental factors. The nation has about 3 million tonnes of modern steel storage capacity, Aggarwal said.

“The preference for steel silos is gaining momentum,” he said. “A reduction of grain loss through more science-based storage is one of the most practical solutions to address increasing food grain demand.”

A severe manpower shortage for loading and unloading food grain bags from traditional storage facilities is also increasing interest in silos, he said, as is the rising cost of land. Modern storage silos also optimize land use while increasing stored grain capacity.

“India’s promotion of scientific storage is expected to drive awareness and acceptance among farmers and grain processing companies,” Aggarwal said.

Having more grain storage capacity can reduce post-harvest losses because the bins protect the grain from pests, humidity and fungal growth. The loss from such spoilage is estimated to be around 8% to 10%, Aggarwal said. More storage also will allow the Indian government to maintain larger, safer buffer stocks, thus improving its ability to stabilize prices and respond to food crises, he said.

“Reliable storage supports the public distribution system (PDS) and other welfare schemes by ensuring a steady supply of quality grain,” Aggarwal said. “With less wastage and better grain quality, India can increase its grain exports while boosting the agricultural economy.”

Lastly, having a more robust storage infrastructure will ensure food availability during extreme weather events or crop failures, he said.

Like India, China is expected to see increases in domestic production of corn, wheat and rice. Corn production is estimated at 300 million tonnes, an increase of 1.7% from the previous year, according to the FAS. Wheat production is estimated at 142 million tonnes, an increase of 1.5%, on improved yield and steady planted area, while rough rice production is estimated at 208.6 million tonnes, a 0.5% increase from the previous year. Sorghum and barley production are expected to remain stable, the FAS said, but imports are expected to decline.

The government is implementing policies to increase domestic production and grain self-sufficiency while maintaining strategic reserves and restricting imports, the FAS said.

“China continues to promote higher local production through domestic support programs that focus on yield improvements over trait or quality improvements,” the FAS said. “With Beijing’s focus on food and feed security, area is expected to remain stable, and imports will continue to face policy and regulatory challenges.”

Five years ago, imports of grain (corn, sorghum, barley, wheat and rice) totaled about 64 million tonnes. That dropped to 29 million tonnes in 2024-25 and is expected to inch up to 31 million tonnes in this marketing year, according to FAS data.

Industry sources have said Beijing has limited grain imports since April 2024 by implementing various barriers, including delaying custom clearance and postponing tariff rate quota issuance, the FAS said. In 2024, grain reserve operations at all levels increased purchases of domestic grains to protect farmer income, it said.

“China is trying to strategically place those storage assets in other areas in the country, perhaps farther away from the ports and closer to the growers or closer to the supply,” Ehmke said.

Storage expansion support

The Indian government plans to invest $15 billion to create an additional 700 lakh tonnes (70 million tonnes) of grain storage capacity over the next five years by constructing thousands of warehouses and bins throughout India. In the next three years, the nation plans to triple its wheat storage capacity from 2.8 million tonnes to 9 million tonnes.

India is behind in storage, Ehmke said, because the grain industry is so heavily managed by the government.

“If the government weren’t so involved in supply chain management, this storage would already exist because exporters would have the ability to manage supply based on market signals,” he said. “They’d be able to profit from carries in the market and therefore pay for their own storage. Because that free market does not exist in India, that’s why the government is embarking on this huge project for expansion of grain storage.”

The Indian government has been working to improve storage capacity and quality in the nation for several years through a variety of programs. The Agriculture Marketing Infrastructure (AMI) initiative, introduced in 2014, provides subsidies to individuals, farmers and cooperatives to develop storage infrastructure.

Under the AMI, a subsidy of 25% is granted for projects in the plains while those in hilly and other specified regions can receive a subsidy of 33.33%. As of Oct. 31, 2024, the government said 48,611 storage infrastructure projects have been sanctioned.

The government is using hub-and-spoke model silos where hub silos have a dedicated railway siding and container depot facility, according to a report from the Ministry of Finance. The transportation from spoke silos to hub silos is by road, while transportation from hub to hub is by rail.

In hilly and remote areas, the government is exploring the use of mobile storage units in collaboration with the World Food Programme (WFP) of the United Nations. The units can be installed quickly and have a storage capacity of 400 tonnes. The government also partnered with the WFP on a pilot smart warehouse project. The warehouse uses sensors to monitor temperature, humidity, airflow and rodent activity.

The Food Corporation of India (FCI), a public sector company under the ownership of the Ministry of Consumer Affairs, Food and Public Distribution, is also improving its bulk storage facilities. Each year, FCI purchases a significant portion of India’s wheat and rice output at prices set by the government.

FCI said it has 2.275 million tonnes of steel silos in operation with another 4.1 million tonnes in development. Overall, FCI manages 41 million tonnes of storage capacity, both owned and hired, it said. The projects are undertaken under a public-private partnership model, FCI said.

Recent projects included 50,000-tonne silo facilities in Darbhanga, Bihar; Samastipur, Bihar; Sahnewal, Punjab; Baroda, Gujarat; Chheharta, Punjab; and Batala, Punjab.

AGI’s Aggarwal said demand in India is primarily for flat-bottom storage with a few requests for hopper-bottom silos. Capacities for individual bins range from 2,500 to 12,500 tonnes for flat bottom and 100 to 500 tonnes for hopper bottom.

“At present, the share of greenfield versus expansion projects is equal,” he said. “Geographically, demand is uniformly spread across India.”

Even with the government support, challenges remain in expanding modern storage in India, including the lack of awareness and financing for large projects, Aggarwal said. There’s also limited availability of the right technology for bins and material handling equipment, quality galvanized iron sheets and other systems needed such as engineering, procurement and construction services, maintenance, engineering and government support.

With its concentrated efforts to modernize its grain storage, China grew its total capacity to 700 million tonnes by the end of 2023, an increase of 36% from 2014, according to the National Food and Strategic Reserves Administration.

From 2021 to 2025 alone, the nation built and upgraded grain storage facilities with a total capacity of more than 65 million tonnes, according to the administration. It said outdated storage methods, including stack storage and open-air piles, largely have been eliminated across the country. Four-in-one grain storage technologies, covering mechanical, ventilation, fumigation, monitoring and cooling, have been applied as a standard in state-owned grain warehouses.

It provided a combination of central investment subsidies, local fiscal fund subsidies and farmers’ self-financing to provide new storage equipment, according to the Henan University of Technology policy brief.

“It has also built a post-harvest service system to meet farmers’ technical service needs for cleaning, drying, and storing grain after harvest, effectively improving farmers’ grain storage conditions, enhancing storage quality, and reducing farmers’ grain storage loss rates,” it said.

Many digital grain warehouses have been built or renovated, reducing the average grain storage loss rate and bringing it below 1.2%, the brief said. Each time grain enters or leaves the warehouse, losses can be reduced by more than 100 tonnes.

Looking ahead

Anticipating India’s growing demand for silos, AGI established a manufacturing line in 2022 for grain storage and permanent handling solutions in Bangalore, India. The facility caters to domestic and export demand from Asia-Pacific customers.

“It is the single largest supplier of bins and has built storage facilities for 700,000 tonnes of wheat,” Aggarwal said.

AGI is planning another fully automated manufacturing line at a new 55-acre facility near Hosur, Tamil Nadu. The facility, which should be commissioned by third quarter 2026, will focus on addressing the growing need for grain storage and permanent and portable grain handling and conveying equipment, he said.

AGI Milltec has expanded its presence with installations of over 15,000 mills in India within a span of 24 years. The company understands the industry’s need to accelerate efforts to meet the food security challenges ahead, Aggarwal said.

“We are working hard to spread awareness about the values and benefits of scientific storage in campaigns shared through social media, trade shows and customer meetings,” Aggarwal said. “Our sales team receives regular technical and commercial training, equipping them to confidently aid and advance customer opportunities.”

It’s possible improved storage that decreases spoilage and allows nations to build stocks over time could free up more wheat and rice for export, Ehmke said.

“But that’s highly dependent on policy and whether the government lifts export controls,” he said. India currently has export bans on wheat and wheat products and just this spring eliminated rice export bans that started in summer 2022.

“Whatever the storage is going to look like, it’s going to reduce spoilage,” Ehmke said. “In India that is a major win. You have to applaud their efforts.”

Tags: China, India, grain storage, silos