France Becomes a Key Wheat Supplier to China
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China Wheat imports are forecast up to 12.0 million tons this year—the country’s highest level of imports since 1995/96 when imports reached 12.5 million. Domestic Grain prices in China have remained high given the country’s minimum support price policy and reduced auction activity amidst uncertainty surrounding the Government’s COVID-19 policies. Chinese Wheat prices have lingered around $450/ton over the past year, while Chinese corn prices have averaged above $400/ton. Meanwhile, international Wheat prices have decreased over the past few months, falling below $400/ton with ample exportable supplies from Australia, the European Union, and Canada.
Competitive pricing has prompted China to import large volumes of milling and feed-quality Wheat. Australian Wheat is exceptionally competitive following three consecutive years of record crops. China continues to aggressively purchase Australian Wheat supplies, with July-February imports up 66 percent compared to the previous year. Imports from Canada, which supplies hard red milling Wheat to the Chinese market, are up 83 percent year over year.
With international Wheat at a discount to domestic Grain, some Chinese feed mills have substituted 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. Food, seed, and industrial use, meanwhile, remains robust.
The price of old Wheat continues to decline, and the purchase price of feed enterprises is the same as that of corn, which is around 2,800-2,900 yuan/ton. Manufacturers mostly purchase more stored Grain, which coincides with the Wheat rotation period, and the supply is relatively sufficient. The impact of corn is still large. The purchase of feed enterprises has shifted to Wheat, and the demand for corn has declined. Then, the primary consumption
The average value of old Wheat is about 2860 yuan/ton, and the market expects new Wheat to be extended to 2700 yuan/ton. Of course, this is not entirely accurate, and it will also be affected by mentality, prices of other substitutes, and weather. Wheat is cost-effective for feeding companies, and some price differences are less than 0.05 yuan/kg. In some areas, there is a trend that the price of corn is higher than that of Wheat and has recently been affected by the difficulty of unloading imported soybeans. Manufacturers are more motivated to purchase Wheat.
China Wheat Trade Pattern
In February 2023, China’s Wheat exports accounted for up to $1.56 million, and imports accounted for up to $583 million, resulting in a negative trade balance of $581 million. Wheat was exported mainly to Syria ($828k), Nicaragua ($523k), and Lesotho ($207k). Wheat was primarily imported from Australia ($256 million), France ($227 million), the United States ($51 million), Canada ($46 million), and Kazakhstan ($1.65 million) in February. According to AgFlow data, China imported 1.7 million tons of Wheat from Australia in Q1 2023, followed by the United States (0.5 million tons), France (0.3 million tons), and Canada (160,000 tons).
In 2021, China imported Wheat worth $2.94 billion, becoming the world’s 4th largest importer of Wheat. In the same year, Wheat was China’s 111th most imported product. China imports Wheat primarily from Australia ($912 million), the United States ($801 million), Canada ($663 million), France ($498 million), and Kazakhstan ($41.5 million).
In 2021, China exported Wheat worth $2.98 million, making it the 56th largest Wheat exporter in the world. In the same year, Wheat was China’s 1154th most shipped product. The leading destination of Wheat exports from China is Afghanistan ($1.17 million), Ethiopia ($951k), Egypt ($299k), South Korea ($152k), and Spain ($142k).
Other sources: CHINA GRAIN
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