China will look to global markets to ensure its supply of wheat this year, the rains in recent weeks have damaged some 10 million tons of grain, or more than 8% of the annual production.
World's largest producer, China has already purchased U.S.A and French large quantities of wheat. The increase in imports could promote higher world prices and exacerbate existing tensions fueled by an unfavorable climate in the United States, Russia and Ukraine. "The rain has eroded the quality of wheat in southern of Henan and parts of Jiangsu Province," said Ma Wenfeng, an analyst at Beijing Orient Agribusiness Consultant. "Much of the wheat began to germinate and can no longer be used by millers, it can only serve to feed." Henan is the first wheat-producing region in China with a harvest of about 31 million tonnes per year, against 11 million for Jiangsu. In Henan, some 10 million tons have been damaged and are no longer able to supply the country's reserves, according to the China National Grain and Oil Information Center, a research center of the dependent state. It has lowered its forecast for wheat harvest 2013 to 120,630,000 tons, against 121.9 million previously.
For its part, the U.S. Department of Agriculture (USDA) estimates that China will import 3.5 million tonnes of wheat in the next 12 months but analysts and specialized traders now believe that this figure is well below reality. Over the last three months, Beijing has purchased approximately 1.5 million tons of U.S. wheat according to statistics from the USDA, a volume increase of 10% compared to the same period last year. More unusual, China bought about 200,000 tonnes of French wheat for delivery in August, September and October, traders reported last week. France produces 36 million tonnes of wheat per year. Chinese imports from Uzbekistan should be limited by the rail capacity, noted professionals. China accounts for about 20% of production as global consumption of wheat.
