Bad weather drives China wheat imports to 7-year high

PUBLISHED : Wednesday, 24 October, 2012, 7:29pm
UPDATED : Wednesday, 24 October, 2012, 7:29pm

China, the world’s top wheat producer, imported 524,156 tonnes of the grain in September, up 196 per cent from a year ago, after the domestic harvest was hit by bad weather.

September’s imports brought total imports for the first nine months of the year to 3.21 million tonnes, the highest since 2005, according to official data.

Chinese flour mills purchased 295,000 tonnes of high-protein wheat from Canada this month after domestic wheat quality was damaged during a harvest in June.

“Mills have stepped up imports given tightening global supplies while the domestic harvest has also been damaged. High-quality Canadian wheat is favoured by mills for blending and we expect imports will be at least 600,000 tonnes,” said an industry analyst.

“China will shift some of its needs to Canada away from the United States, while imports from Australia will likely fall too,” said the analyst.

A US drought has sent Chicago wheat prices soaring by nearly 40 per cent since June, while dry weather is also threatening yields in Australia, with output in the world’s second-largest exporter forecast to fall more than a quarter from last year.

China increased imports of feed-grade wheat from Australia to substitute for expensive domestic corn from late last year, but future imports look uncertain after a bumper domestic corn harvest pressured domestic corn prices.

Imports of Australian wheat in the first nine months rose 305 per cent to 2.2 million tonnes, while imports from the United States jumped 72 per cent to 523,944 tonnes.

China’s corn imports in the first nine months also surged 548 per cent to 4.1 million tonnes, of which a majority came from the US, the largest exporter. The deals were signed in the first half of the year.

China became a net importer of corn, rice and wheat in the first nine months as domestic production failed to match growing demand amid the country’s rapid urbanisation.

Beijing’s stockpiling of grain from farmers also pushed grain prices higher than overseas in the first half of the year, encouraging more imports.

The surge in imports came as the agriculture ministry said the country would reap a record grain harvest this year.

The ministry did not give estimated numbers, but said the country’s total grain output would rise for a ninth year in a row. China harvested 571.21 million tonnes of gralast year, a rise of 4.5 per cent from 2010.