China's wheat harvest partially spoiled
China's wheat harvest is set to shrink for the first time in 10 years. The first cautious forecasts speak of 2.6 million tons of losses, other sources of information already estimate 10 million tons. The current status of the Chinese wheat harvest is estimated at 118 million tons. Unfavorable weather with excessive rainfall at the end of May and June has led to quality reductions and sprouting. Occasionally, shrivelled grains covered in fungi and mould are said to occur to such an extent that even the use of the crop as feed grain is questionable. A total of 40 million tons are said to be infested. Baking wheat qualities are produced with imported wheat mixed in. The main growing regions affected are Henan, Anhiu and Hubei. Henan produces more than a quarter of China's wheat production.
The result is increased demand for imports, which has already been reflected in Chinese purchases in France, Australia and the USA. Around 0.8 million tons were ordered at short notice. A further 1.6 million tons of new crop has been pre-ordered in the USA. In addition to the priority import of baking wheat qualities, feed grain is also expected from abroad.
In view of the poor quality and the price-driving effect, government purchases to replenish government stocks have already been postponed. French imports are said to have been almost 15 dollars per tonne cheaper than domestic goods.
Experience with China's information policy shows that there may be much more behind the published figures. However, the discussion about poor wheat quality took place around the same time last year without any major consequences.
The assessment that China could become a significant wheat importer in the course of the 2013/14 marketing year cannot be dismissed out of hand. In view of the fact that the global wheat market was not over-supplied in 2013/14, this is certainly of noteworthy importance and has already been reflected in the stock market prices.
