China Delays Australian Wheat Imports, Pressuring Chicago Prices
China, the world's top wheat buyer, has delayed imports of approximately 600,000 metric tons of wheat, primarily from Australia. Excessive domestic supplies have reduced demand, prompting China to offer these cargoes for resale to other buyers.
China imported 6% of global wheat in the year to June 2024, as per U.S. Department of Agriculture data. This decline in imports could exert downward pressure on benchmark Chicago wheat prices, which remain below $6 a bushel.
China's ample corn and wheat harvests have resulted in well-stocked reserves. To support domestic prices that have fallen, China is postponing the arrival of new wheat until April.
A Singapore-based trader has reported direct knowledge of four shipments totaling 240,000 metric tons (three from Australia and one from Canada) being resold by Chinese buyers in Southeast Asia. An Australian trader has also confirmed the delay of two wheat shipments to China, scheduled for February delivery, with one delayed until April.
China has also redirected or delayed eight to ten Australian shipments booked for January or February deliveries and has not booked any shipments for March.
Australia typically supplies wheat to China in the first quarter of the year after its fresh harvest. China's state-owned COFCO, the primary importer of these delayed or redirected cargoes, is covering the costs of postponement, including storage charges.
China's goal is to protect its farmers by reducing wheat imports for feed and flour use. Sinograin, China's state stockpiler, plans to expand domestic corn purchases, further reducing wheat demand.