CHINA- China is forecasted to import approximately 12 million tonnes of wheat in the marketing year 2022-23, according to a report by the Foreign Agricultural Service of the US Department of Agriculture (USDA) .
According to the report, this level is the highest China has imported since 1995-96 when the nation imported 12.5 million tonnes, and this new estimate will make the country the world’s largest wheat importer in MY 2022-23.
The USDA attributes this dynamic to international wheat selling at a discount to domestic grain, prompting some Chinese feed mills to substitute corn with imported wheat in feed rations.
“Although China’s wheat feed use is down year-over-year as corn feed use rebounds, it still represents a quarter of the country’s total wheat consumption,” the USDA said. “Food, seed, and industrial use, meanwhile, remains robust.”
Wheat prices remain steady at around US$450 per tonne, while global prices are well below US$400 per tonne.
This considerable difference is the reason for the multimillion wheat imports flowing into China, and if the trend continues, China will continue posting record imports in the future.
The report provides that domestic grain prices have stayed high due to the country’s minimum support policy and reduced auction activity caused by the uncertainty surrounding the government’s COVID-19 policies.
“Competitive pricing has prompted China to import large volumes of both milling and feed quality wheat,” the USDA said. “Australian wheat is especially competitive following three consecutive years of record crops.”
China’s purchases of Australian wheat from July-February were up 66% compared to the previous year, while imports from Canada were up 83%.
Other heavy importers for the marketing year were Turkey and the EU, both at 10.5 million tonnes, and Indonesia at 10 million tonnes.
Globally, wheat trade is down, with reduced exports from Argentina, Brazil, and the EU offsetting greater Black Sea exports which continue to flow at competitive prices.
Black Sea exports will likely continue thriving following an extension of the Black Sea Grain Initiative unless Russia decides to scrap the deal as recently announced.
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