China’s Wheat Imports Could Hit New High in 2023

China is on pace to import record volumes of wheat this year following a poor harvest and a surge in domestic prices.

The country’s wheat crop fell to 137 million tonnes in 2023/24, down slightly from last year and the first decline in five years. Abundant rainfall in the country’s top wheat-producing regions prior to the harvest substantially reduced the crop’s quality, driving an abnormally large percentage of the crop to animal feed uses.

The wheat crop year in China, the world’s largest producer and consumer of wheat, runs from July through June. Gro’s machine-learning China Wheat Yield Forecast Model, which goes live every year at the end of October, can offer insight into the country’s newly planted crop as the season progresses.

This year, China’s domestic wheat prices began rising in late July and surpassed corn and rice in mid-August, as seen in the chart below.

As a result, the country’s wheat imports have skyrocketed in 2023, with the totals from the first nine months of the year up by 64% compared to the same period last year. The increase reflects the broader structural shift that China has undergone to become a major net importer of grains, a trend Gro’s models have highlighted since January 2020.

However, this year’s uptick comes at a time when global wheat supplies have been constricted by extreme weather conditions. Australia, which is China’s top source of wheat imports, has grappled with its own production cuts resulting from drought exacerbated by El Niño.

The crop in Canada, another of China’s key wheat-trading partners, has also suffered this year amid drought and extreme temperatures. So far in 2023, China’s wheat imports from Australia are up 41% from last year and its imports from Canada have more than tripled.

China’s poor wheat harvest has pushed wheat prices (purple line) above corn (blue line) and rice (red line), signaling that the country will need to sharply increase its wheat imports.

Tags: rice, wheat, crop, Эль-Ниньо, China, импорт, harvest, corn, prices, rainfall