PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 10:48 UK, 24th Oct 2012, by Agrimoney.com
Surge in Chinese wheat imports 'to set a trend'

Chinese wheat imports look set to trounce market expectations for 2012-13, putting extra upward pressure on world prices, Rabobank cautioned, after data showing a near-tripling in buy-ins.

China imported 524,156 tonnes of wheat last month, a rise of 196% on September last year, customs officials said.

The figure took above 1.0m tonnes the country's purchases for the first three months of 2012-13.

And, with a further 295,000 tonnes already known ordered from Canada this month, means China's imports are already approaching the 1.5m tonnes that the US Department of Agriculture, whose data set market benchmarks, has factored in for the whole season.

'Not priced in yet'

The September number was also slightly above forecasts from Rabobank, which sees China importing 3.6m tonnes of wheat in 2012-13, which would be the highest total in eight years.

"This is something that the market should be looking at," Rabobank analyst Erin FitzPatrick told Agrimoney.com.

"We have not seen China as a major wheat importer since 2004-05.

"I do not think people have been paying attention to China from a wheat perspective. Nor are larger Chinese imports priced into the market yet."

But "it is important," she added, noting against a background of negative wheat supply news, with Ukraine on Wednesday confirming a ban on exports of the grain from November 15, and with hopes for the Australian crop decreasing.

'Severe blight'

China's growing wheat purchases come against a background of elevated world feed prices, thanks to poor corn and soybean crops in both North and South America.

However, many analysts believe that China's wheat harvest was far lower than the 118.0m tonnes at which the USDA has pegged the crop, with Rabobank estimating it at 106m tonnes, flagging reports of heavy losses to disease.

The US Grains Council in June warned of a "severe blight" on the crop, while the USDA's own office in Beijing in August said that its field surveys had revealed results "not as positive" as those of Chinese officials.

"Head blight had spread to more areas than normal this year," the USDA staff said, cautioning that higher planting densities appeared to have encouraged the spread of fungal infections.

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