China to boost wheat imports because of rain
"Three to four million tonnes ... this is a very normal figure," said Yu Xubo, president of state-owned trading company COFCO, referring to the USDA estimate. "If there are quality issues and depending on prices, it may be higher."
China has been aggressively buying U.S. wheat, taking around 1.5 million tonnes in the last three months, according to the USDA data. That is a rise of almost 10 percent from the same period a year ago and compares to a total 3.2 million tonnes in 2012/13.
China made a rare purchase of about 200,000 tonnes of wheat from France, European traders said last week, for shipment in August, September and October.
Traders said the country is likely to buy more French soft wheat as it is cheaper than similar-quality U.S. wheat. French soft wheat is quoted around $265 a tonne, free on board, for August shipment, while similar quality U.S. wheat is being offered at $275-$280 a tonne.
Supply from the Central Asian nation of Uzbekistan, which sends wheat to China by train, is likely to be capped by limited rail capacity, industry players said, adding that imports would remain around 100,000 tonnes this year.
Chinese wheat imports started climbing in 2011/12 after being limited by ample domestic supplies since the early 1990s.
The country is struggling to maintain self-sufficiency in corn and wheat production due to stagnating production and growing domestic demand driven by rising incomes.
"China's imports of corn, soybeans and metals have been rising rapidly in past years as the country's economic growth goes on," said a European trader. "The question is if this import need has now turned to wheat."
Analysts said the country's wheat imports would be affected by global prices to some extent. "They will continue to do opportunistic buying," said one Australia-based analyst. "It doesn't seem like panic buying at this point in time."
The country has also been importing wheat to rebuild its massive but aging state reserve. China does not publish data on state stockpiles but the USDA has estimated the country's closing stocks at 58.75 million tonnes at the end of 2012/13, almost half the 120 million tonnes it consumed during the year.