China Wheat import hits record high
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In 2021, the overall local demand for Wheat exceeded the year’s output. The substantial increase in feed consumption was the main reason. The total consumption was about 148.8 million tons, an increase of 23.2 million tons or 18.5% year on year. Among them, milling consumption was 88 million tons, an increase of 1 million tons or 1.1% year on year.
Feed consumption was about 45 million tons, an increase of 22 million tons or 95.7% year-on-year.
The significant price difference between Wheat and Corn has led to a large amount of Wheat being used as the main feed instead of Corn. In addition, the continuous expansion of live pig inventory has also led to a steady increase in feed processing consumption. Wheat industrial consumption and seed uses were 9.7 million tons and 6.1 million tons, respectively, a slight increase of 100,000 tons year-on-year due to increased industrial flour and growing Wheat plantings.
China’s Wheat planting area accounts for about 22% to 30% of the country’s total cultivated area, and the planting area covers all provinces (cities and autonomous regions) across the country. The sown area of
The domestic Wheat price is high, the downstream market demand tends to improve, and grain-using enterprises have increased their purchases of Grain sources. Data shows that the market price of Wheat in the country was 138 yuan per 60kg in April 2022. It is projected that the average market price of old Wheat in the main producing areas will be 2740-2800 yuan/ton (US$406-415 per ton) before the new standard quality second-class white Wheat comes out this year, whereas the average market price in the main producing areas is assumed to be 2840-2900 yuan/ton. The domestic Wheat market price is expected to stabilize in the later period.
The state raised the minimum purchase price of Wheat to 2,300 yuan/ton this year, reflecting the high importance the Government attaches to food security. The Government also stabilized subsidies for farmers to plant Grains, increased incentives for major grain-producing counties, and promoted full cost insurance and planting income insurance for the three major Grain crops to cover all significant grain-producing counties in key producing provinces.
In recent years, various localities have accelerated the construction of high-standard farmland, intensified efforts to transform low- and medium-yield fields focused on improving farmland infrastructure conditions, and cultivated and popularized high-quality varieties.
Growing demand for imported Wheat
According to the China Business Industry Research Institute, Wheat imports continue to increase from 3.1 million tons to 9.8 million tons (a record high) from 2018 to 2021, with an average annual compound growth rate of 47.6%. Over 80% of imported Wheat comes from the United States, Canada, and Australia. In value terms, Wheat imports increased to US$3,078 million (a record high), a year-on-year increase of 31%. Wheat imports from January to April 2022 were 3.75 million tons, having a value of US$1,382 million, a year-on-year increase of 21.4%. According to the AgFlow data, the import shipments reached 4.6 million tons in Jan-July.
The main reasons for the significant increase in Wheat imports are i) the domestic milling consumption continues to demand high-grade Wheat, and ii) domestic feed consumption also needs to import a large amount of feed-grade Wheat.
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