Wheat imports are 'not of concern'

Weather likely to cut harvest in key provinces but international prices expected to stay steady

China's growing wheat demand could soon make it the world's top importer of the grain, although such a change is not expected to push global wheat prices higher, industry experts say.

Frost in spring and wet weather in May and June will cut China's wheat output by 2.6 million metric tons to 118 million tons in wheat-producing provinces such as Henan, Anhui, Jiangsu and Shaanxi this year, said a report released by the foreign agricultural service of the US Department of Agriculture.

China has long maintained its food security by producing 95 percent of its grain consumption. However, the nation's growing demand for wheat imports is causing some concern that China is likely to replace Egypt to become the world's largest wheat importing nation.

But Ding Shengjun, a senior researcher at the Academy of the State Administration of Grain, says China's rising wheat imports aim to refurbish its inventories, which need to be replaced with better-quality wheat.

China Grain Reserves Corp, which manages central government reserves, began to renew its stock and use the previous wheat stores for feed in May.

The country's wheat imports nearly tripled to 3.68 million tons in 2012 compared with the previous year, according to the General Administration of Customs.

Abdolreza Abbassian, a senior economist at the Food and Agriculture Organization of the United Nations, says people should be aware of the enormous difference between China and Egypt.

"While Egypt imports almost 50 percent of its domestic consumption requirements, wheat imports by China, even if they were to increase to 8.5 million tons, that would still represent no more than 7 percent of its total domestic requirement," says Abbassian.

The Food and Agriculture Organization forecast that China's wheat imports for the 2013-14 crop year will hit 5 million tons. The forecast was based on June and July trade figures, which will be 2 million tons above the 2012-13 levels.

China imported 1.36 million tons of wheat in the first half of this year.

Australia's Department of Agriculture, Fisheries and Forestry says it exported 426,000 tons of wheat to China in the first five months.

The China National Grain and Oils Information Center says China has placed a wheat order for 1.5 million tons from Australia in the past weeks.

"The reduction of China's wheat output has offered export opportunities for major wheat producers throughout the world," says Wen Tiejun, dean of the school of agricultural economics and rural development at Renmin University of China in Beijing.

He added that a recent drop in wheat prices in the global market is also good news for China as an importer.

Wheat imported from Australia, the United States and France costs much less than wheat produced in China.

According to the US Department of Agriculture, the average US wheat price was $303 per ton on July 30, compared with $407 per ton at China's Zhengzhou Commodity Exchange

The rising price of corn has also prompted a number of Chinese livestock farms to purchase foreign wheat.

The China National Grain and Oils Information Center forecast that China will import 6.5 million tons of wheat from the international market in the 2013-14 crop year, a nine-year high.

"Adequately raising wheat imports is fairly useful to help China ease the pressure on wheat-related food prices," says Ding Lixin, a researcher at the Chinese Academy of Agricultural Sciences in Beijing.

zhongnan@chinadaily.com.cn

(China Daily Africa Weekly 08/16/2013 page23)