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In 2019/20, China wheat imports are forecast at 3.2 million tons
21.12.2019 10:30 "Agro Perspectiva" (Kyiv) —
According to the report of the USDA Grain: World Markets and Trade (December 2019), in the late 1980s/early 1990s, China was a global leader for wheat imports, importing as much as 15.9 million tons in 1991/92. With the world’s largest population, China began promoting its domestic agricultural production in the 1990s to ensure domestic food security and reduce import dependency through subsidies and minimum support price systems. This has assisted in the growth of China’s wheat production year-over-year to meet rising domestic consumption while simultaneously reducing the need for imports. Today, China maintains its position as the world’s leading wheat producer at 133.6 million tons in 2019/20 and holds about half of the world’s wheat stocks. In 2019/20, China wheat imports are forecast at 3.2 million tons, ranking it tenth among major import markets. The United States has held as much as 60 percent of the market (2013/14); however, its share of the China market fluctuates vastly year-to-year as it competes with Australia and Canada wheat supplies. In 2018/19, exports of U.S. wheat dwindled amidst U.S.- China trade tensions to a meager 1 percent of China’s imports. Australia exports have also diminished, though largely due to 3 years of drought. As a result, Canada’s 2018/19 market share has nearly doubled from the prior year; neighboring countries, such as Kazakhstan, have also witnessed significantly higher trade with China. In 2001, China became a member of the World Trade Organization (WTO) which opened a wheat tariff-rate quota (TRQ) of 9.6 million tons. Fulfilling the TRQ would propel the country to become the world’s third-largest importer. However, China’s TRQ system created risks and uncertainty for traders and was ruled in violation of the WTO in April 2019. Despite relatively high domestic prices that, based solely on economics, should trigger greater imports, China consistently falls well below filling the TRQ. It remains to be seen how the WTO ruling will change China’s import dynamics.
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