China plans to import a record amount of wheat this year after rains damaged local crops, and the purchases will support global prices, which have fallen more than 25% this year, according to several traders consulted by Reuters.

Overall, China’s wheat imports are expected to reach 12 million tonnes in 2023, surpassing the previous record of 9.96 million tonnes set in 2022, and the buying spree is expected to continue into 2024, two Singapore-based traders said.

Beijing has reserved millions of tons from Australia and France

China, the world’s biggest wheat producer and consumer, bought about two million new-harvest wheat from Australia in October, with shipments to begin in December, sources cited by Reuters said.

In addition, since September, China has reserved about 2.5 million tonnes of wheat from France for delivery between December and March, the sources said, stressing that these are unusually large volumes for this time of year.

“China has problems with the quality of its wheat crop this year, and Australia, which is the main supplier of wheat to China, will have a much smaller crop,” said one trader who works for an international company that sells wheat to China.

“Buy as much as possible and as soon as possible”

“The Chinese buy everything they can, and as quickly as possible. Over time, supplies will become tight, especially from Australia,” the trader added.

Beijing authorities said this year’s wheat harvest fell 0.9 percent to 134.5 million tons, the first drop in seven years, due to heavy rains that affected crops just before harvest.

Although Beijing authorities did not provide an estimate of the quality of this year’s wheat crop, traders said about 25 million tonnes, or 20% of China’s wheat crop this year, were affected by the rains.

Some of this rain-damaged wheat can only be used as animal feed or mixed with high-quality imported wheat before being processed into flour.

Purchases of wheat in China supported prices

Customs data show that from January to September 2023, wheat imports into China rose by 53.6% year-on-year to 10.17 million tonnes, of which 6.4 million tonnes came from Australia and 1.8 million tonnes from of Canada But these figures do not include orders for later delivery, such as recent US wheat purchases.

China’s large purchases of Australian wheat could force rival importers such as Indonesia and Japan to seek alternative sources of supply from North America and the Black Sea region, traders said.

China’s purchases of wheat have stabilized world prices, says a trader from Singapore.

“But we expect prices to rise in the future as China begins to buy more high-quality wheat from the US and supplies from Australia are reduced,” the trader estimated.

Given Australia’s smaller wheat crop, traders and analysts say China is likely to import significantly more wheat from France in the coming months. (Agerpress)

(Article photo: ©Adam Radosavljevic|Dreamstime.com)