China has jumped up the league of buyers of Australian wheat, despite an apparently large domestic harvest, putting the "mystery" surrounding Beijing crop data back to the fore.
More than 400,000 tonnes of Australian wheat are expected to have been shipped to China between the start of November and the end of this month, grain handler CBH Group said.
The figure is higher than that for the whole of 2008-09, and could reach 700,000 tonnes by the end of 2009-10, CBH, Australia's biggest wheat exporter, said.
China has also raised shipments from many other countries – imports from America have tripled to 128,200 tonnes since July – raising questions among analysts, when the country already appears to have abundant domestic stocks.
Trade influence?
With China already the world's biggest importer of soybeans, is the country "now also gaining influence on the world wheat market?" Commerbank asked.
The German bank said that, for now, the answer was "no", attributing wheat import growth to a desire to build stockpiles, rather than to fix a supply shortage which might herald a more lasting presence in the import markets.
China, the world's biggest wheat producing country, enjoyed a bumper harvest of 114.5m tonnes last year, more than 10m tonnes ahead of demand forecast for 2009-10, according to US Department of Agriculture estimates, which are based largely on official statistics.
'Always a mystery'
However, USDA staff have issued a series of warnings over the reliability of official Chinese crop data, saying that a subsidy system based on production encourages regional authorities to exaggerate harvest figures.
|
Chinese wheat dynamics, 2009-10 (annual change) according to USDA
Production: 114.5m tonnes (+1.8%)
Imports: 800,000 tonnes (+67%)
Use: 103.0m tonnes (+0.5%)
Year-end stocks: 60.0m tonnes (+23%) |
Tom Puddy, marketing chief at CBH's GrainPool marketing arm, said: "It is always a mystery about what [China's] actual stocks are."
According to the USDA, China will end 2009-10 with inventories of 60m tonnes, up 23% year on year, and sufficient supplies to last seven months. The figure assumes global imports of 800,000 tonnes.
India, which is also sitting on huge wheat stockpiles, also bought a small quantity of Australian wheat last year because of its lower price, with the domestic market supported by a generous farm support programme.