In its April World
Agricultural Supply and Demand Estimates (WASDE) report, the US Department of
Agriculture (USDA) estimated that China's wheat imports will rise to 12 million
tonnes in the 2022/2023 season. This would be China's highest level of imports
since the 1995/96 season, when imports reached 12.5 million tonnes. According
to the USDA, China will overtake Egypt to become the world's largest wheat
importer this season.
Domestic grain prices in China have remained high due to the country's minimum support price policy and reduced auction activity amid uncertainty surrounding the government's COVID 19 policy. Chinese wheat prices have hovered around $450/tonne over the past year, while Chinese maize prices have averaged over $400/tonne. Meanwhile, international wheat prices have trended lower in recent months, falling below $400/tonne, with ample exportable supplies from Australia, the European Union and Canada.
Competitive prices have led China to import large quantities of both milling and feed quality wheat. Australian wheat is particularly competitive following three consecutive years of bumper harvests. China continues to buy Australian wheat supplies aggressively, with imports in the July-February period up 66 per cent on last year. Imports from Canada, which supplies hard red milling wheat to the Chinese market, are up 83 per cent year-on-year. "China's wheat imports are raised by 2 million tonnes to 12 million, which would be the highest imports for China since 1995/96. China's imports are raised due to strong imports to date, particularly from Australia; China is now the world's leading wheat importer in 2022/23," the USDA noted in the report.
With international wheat at a discount to domestic grain, some Chinese feed mills have been substituting imported wheat for corn in feed rations. Although China's wheat feed use is down year-on-year as corn feed use rebounds, it still accounts for a quarter of the country's total wheat consumption. Meanwhile, food, seed and industrial use remain robust.