May 19, 2010

 

Australia's wheat exports to China may slow down

Australian wheat exports to China are expected to slow to a trickle in the coming months after surging in the first half of the 2009/10 marketing year.

 

China's demand for Australian wheat this year was coming to an end with only a few more cargoes expected to be shipped to fill current orders, said CBH Group's chief of grain marketing, Tom Puddy.

 

"I don't think we will see a big spike in China's wheat imports in the short-term - they will only step in if they have a crop failure," said Puddy.

 

During the first half of the official marketing year ending in September, China's demand for Australian wheat was almost double the whole of the previous year, helping to offset weaker sales in other markets as bumper northern hemisphere harvests flooded markets.

 

CBH has a slightly different marketing year which runs from November to October.

 

Puddy said about 570,000 tonnes of mainly Australian Standard White (ASW) wheat would have been shipped to China from November to the end of May, the highest volume in five years.

 

"China has been replenishing its reserve stocks of ASW type wheat that they find hard to produce in China," said Puddy. "They have been just topping up the cupboard to make sure they've got sufficient reserves."

 

China, which harvested 115 million tonnes of wheat last year, is largely self-sufficient in wheat but buys specific qualities from Australia, Canada and the US, mainly for use in steamed buns and some types of noodles.

 

Chinese imports of Australian wheat in 2009/10 are likely to represent about 4% of total Australian wheat exports in the current marketing year that ends in September.