CHINA- China has made its most substantial purchase of US wheat since 2020 to address the impact of rain-damaged domestic crops. The transaction involves a staggering 440,000 tonnes of US wheat, according to the US Department of Agriculture (USDA), significantly boosting US wheat exports.

The announcement on December 4 marked a pivotal moment for US wheat exports, which were projected by the USDA to reach a 52-year low of 19 million tonnes during the 2023-24 marketing year that commenced on June 1. As of November 23, US export sales stood at 12.7 million tonnes, trailing last year’s pace by 6%.

China’s decision to import such a substantial quantity of US wheat comes in response to quality issues arising from heavy rain impacting key growing areas in its 2023 wheat crop just before the harvest. 

Analysts note that China intends to blend the imported milling wheat with its domestic supplies to compensate for the damage and meet its domestic demand for wheat. 

While China is the world’s largest wheat producer, it is also the largest consumer globally, and domestic production does not meet the demand. As such, China has also been actively purchasing wheat from other major exporters, including Australia and France.

This recent series of Chinese purchases specifically focuses on US soft red winter (SRW) wheat, starting from October 3 with a confirmed sale of 220,000 tonnes to China. 

Subsequent transactions included 181,000 tonnes announced on October 13 and another 110,000 tonnes on November 22. 

With the latest acquisition, China’s total US wheat purchases for the current season surpass the 1 million-tonne mark, with the majority consisting of SRW wheat.

The timing of China’s substantial wheat purchase aligns with its efforts to shore up its domestic wheat supply chain and meet the demand generated by unforeseen weather-related challenges. 

This development bolsters US wheat exports and underscores the global interconnectedness of the agricultural markets, where nations collaborate to address challenges and maintain stability in the face of agricultural uncertainties.

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