August 23, 2013

China, which is expected to surpass Indonesia as Australia's largest customer of wheat in 2013-14, has bought 55,000 tonnes of Australian wheat at around US$330/tonne, basis cost and freight, for December shipment.

China's purchases of new crop Australian wheat that will be harvested and exported from the fourth quarter onward, already have risen to more than 2.2 million tonnes and is likely to reach four million tonnes in the next marketing year that begins October 1, executives said on the sidelines of an international grains conference. China has imported around 560,000 tonnes of Australian wheat so far this marketing year, according to industry estimates.

Chinese demand is providing some support to international prices at a time when global output is expected to hit a new record this year, traders said. China already has bought 3.7 million tonnes of US wheat for shipment since June 1 this year and 1.1 million tonnes already have been shipped, according to an estimate of the USDA. The department forecasts China to be the world's largest wheat importer at 9.5 million tonnes in 2013-14.

Indonesia has turned to the Black Sea region and India this year for cheaper wheat and its imports from Australia are likely to be around 3.8 million tonnes in 2013-14, the executives said.