(Yicai Global) May 25 -- China's wheat imports soared 80 percent in the first four months of the year, mainly because the price of the cereal in overseas markets fell more than at home, according to the latest official data.
China imported nearly 6 million tons of wheat from January through April, equivalent to 60 percent of last year’s total, numbers from the General Administration of Customs showed. April’s imports alone jumped 141 percent from a year ago to 4.7 million tons.
Incoming shipments of wheat have exceeded 1.3 million tons a month this year mainly because prices were lower abroad than in China, making imports more profitable, said Meng Li, an agriculture ministry official.
Rising imports are due to the excessive optimism among Chinese processing companies over replacing domestically grown wheat with the overseas product as animal feed, Zheng Wenhui, a grain economy researcher at Guangdong South China Grain Trading Center, told Yicai Global.
That has led to vast amounts of Australian standard white wheat, which is mainly used as animal feed, being brought in, Zheng added.
Sixty percent of China's wheat imports between January and April were from Australia, according to GAC data. Imports from Canada accounted for 19 percent of the total, followed by France at 13 percent and the United States at 8 percent.
In the second half of the year, imports are not expected to exceed the same amount shipped in a year earlier by very much, as most of it will be high-gluten wheat, Zheng said.
Wheat imports are still likely to surpass the tariff quota of 9.6 million tons for the third straight year in 2023, Meng predicted. But given the higher tariff rates on the shipments exceeding the quota, China's total wheat imports this year will not exceed the quota by much, Meng noted.
China's corn imports fell 8.4 percent in the Janaury to April period from a year earlier. Meng believes this is due to the narrowing price gap between wheat and corn, which is mainly used as animal feed.
In northern China, the gap between the prices of the two fell to CNY50 (USD7) per ton, prompting local feed companies to substitute corn with wheat, with the replacement ratio at some firms exceeding 50 percent. Moreover, the new wheat harvesting season in the main production areas will be at the end of May, further shrinking the demand for corn.
China's soybean imports rose 6.8 percent in the first four months, with a 6.5 increase in barley shipments, the GAC also showed. Imports of rice slumped 39.7 percent in the period, with Meng attributing it to high international prices. Sorghum imports plunged 71 percent.
Editors: Tang Shihua, Futura Costaglione