Amid rains, China is interested in a Black Sea grain deal

UkrAgroConsult

Henan Province, located in the east-central part of China, where a third of all wheat is produced, is experiencing prolonged rains that are unusual for the region. Excessive humidity caused early germination of grain.

“This year we have exceptionally late and heavy rains in most of the northern winter wheat belt. If the rains come too close to harvesting, it damages the crop and leads to germination and the formation of mycotoxins, i.e. mold. Such wheat cannot be used for human consumption. Henan is the largest grain-producing province, and it suffers the most from the rains. But other provinces have problems as well,” said Darin Friedrichs, co-founder of Sitonia Consulting, a wheat buying company in China.

To avoid a crisis, the Chinese government has called for emergency measures in agriculture, including obliging state contractors to buy lower quality wheat from farmers at prices above market prices.

According to Darin Friedrichs, last year’s wheat imports were among the largest in the world, and imports continue to grow.

“If there is a bad harvest, it is likely. China will have to increase its imports next year. This will obviously have an impact on world prices and world markets,” the expert notes.

China annually imports about 20 million tons of corn, 10 million tons of barley and 12 million tons of wheat. This is a very attractive market for agricultural countries.

According to Mykola Gorbachev, President of the Ukrainian Grain Association, China is the largest grain importer from Ukraine. Therefore, Beijing is interested in continuing the Black Sea Grain Initiative, which ensures grain exports.

“We ship 50-70 thousand tons of grain to China to be competitive in that market. Therefore, China is the No. 1 country that will be interested in extending the grain corridor. Because most of Ukraine’s grain went to China both before and during the war.

As of today, Ukraine and China have signed protocols on the export of corn, barley and grain meal, while wheat cannot be exported yet.

Tags: grain, wheat, China