China’s 2020-21 wheat import estimate to surge 140% on year
China’s wheat imports this year will surge to nearly one-and-a-half times that of the last marketing year due to growing demand in the animal feed sector.
China’s wheat imports in the 2020-21 marketing year are expected to reach 10 million million tonnes. This is a 140% surge from the 4.2 million tonnes recorded in the last marketing year, according to a webcast organised by the China National Grain & Oils Information Centre (CNGOIC) on Wednesday June 30.
What is causing the surge?
The increase stems from growing demand from the animal feed sector, with estimates for 2020-21 wheat consumption in feed put at 38 million tonnes. This is nearly 150% up from a volume of 15.5 million tonnes in the previous year.
Given this rapidly growing demand from the feed sector, China has purchased record volumes of wheat for use as a substitute for corn, traditionally the primary grain in animal rations, amid declining corn stockpiles and production in the domestic market from last year.
Lower wheat prices in China’s market also push the livestock sector to snap up the grain to replace corn, where prices have surged over the year.
“We can see the prices of wheat on markets have been much lower than corn’s since October last year,” Li Shengjun, deputy director at the department of decision-making service at CNGOIC, said.
Surging consumption of wheat is expected to create a deficit of 3.04 million tonnes between supply and demand in 2021-22, with the total consumption at 147.3 million tonnes and supply at 144.2 million tonnes.
At the same time, CNGOIC estimated the volume of China’s import wheat in 2021-22 at 8 million tonnes amid increased wheat production and declining total consumption in the new marketing year.
Consumption is expected to at 136.4 million tonnes.
With China’s 2021-22 wheat total consumption expected at 145.6 million tonnes and supply at 144.4 million tonnes, a gap between supply and demand of around 1.15 million tonnes will emerge
This article, by Cai Chen, was first published to agricensus.com on Wednesday June 30.