Over the past few weeks, China has made significant moves in the global grain market, securing between 400,000 to 500,000 tons of wheat from Australia and Canada. This comes as extreme heatwaves threaten wheat yields in key agricultural regions, particularly Henan province, which produces about one-third of China’s wheat.
Domestic Shortages Drive Imports
Despite being the world’s largest wheat producer, China still relies on imports to supplement domestic supply. In 2024, China imported 11 million tons of wheat, worth $3.5 billion, primarily from Australia and Canada. However, imports slowed after a record domestic harvest. Data from Trade Data Monitor shows that in the first seven months of the 2024/25 season (ending March 31), China imported less than 1 million tons—a sharp decline.
Now, with drought and heat stress affecting crops, analysts have cut China’s 2025 wheat production forecast by 5 million tons. This has prompted Beijing to return to the global market, securing Australian milling wheat (55,000-ton shipments for July/August delivery) and 200,000 tons of Canadian wheat.
Why Is China Avoiding U.S. Wheat?
Trade tensions and tariffs may be influencing China’s decision to bypass U.S. wheat, despite America being a former key supplier. Instead, China is turning to Australia, Canada, and Europe—a shift that could reshape trade flows.
Barley Imports Also Rising
China isn’t just buying wheat—it’s also securing 360,000 to 1 million tons of barley from France and Ukraine, with shipments expected in July-August 2024. Prices are reported at $250–254 per ton (C&F China), signaling renewed demand after a year of limited activity.
Market Impact: Will Prices Rebound?
China’s reduced imports in early 2024 contributed to four-year lows in wheat futures (Chicago Board of Trade). However, with weather risks mounting and China re-entering the market, traders speculate whether 2025/26 could see a price recovery.
A Turning Point for Global Grain Trade?
China’s sudden return to the wheat and barley markets suggests rising domestic supply concerns, possibly foreshadowing higher global demand. Farmers and traders should monitor:
- Weather conditions in China’s wheat belt
- Further import tenders from Beijing
- Geopolitical trade shifts (U.S. vs. Australia/Canada/EU)
If China’s domestic production struggles continue, we may see sustained buying pressure, lifting global grain prices. For now, the market waits to see if this is a short-term adjustment or the start of a larger trend.
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