September 15, 2011

 

 

China's south province of Zhejiang received 17,500 tonnes of Australian wheat meant to replenish state reserves at its port last month, a government body said Wednesday (Sep 14).

 

The state quarantine administration unveiled for the first time that Beijing is also building its wheat reserves besides corn.

 

State-owned trading COFCO Co Ltd bought two cargoes from Australia in May and June on behalf of local governments of Zhejiang and Shandong to help them replenish reserves, industry sources said.

 

The imported wheat from Australia would be stored at a state silo in Huzhou, Zhejiang province, the administration said.

 

"China needs to refill its wheat reserves as it has sold out all its imported wheat reserves following years of auctions," said one industry analyst.

 

China has imported nearly 10 million tonnes of wheat from countries including the US during 2003-04, following a lower home harvest in 2003.

 

China's own wheat harvest was hit by drought early this year, although the government said the output was higher than last year, home-grown wheat still cannot meet demand for high-quality flour in making bread and cookies.

 

Meanwhile, China's 11 major wheat-producing provinces purchased a total of 48.49 million tonnes of wheat from 2011's crop as of August 31, sources reported.

 

State-owned grain enterprises bought 31.53 million tonnes of wheat, accounting for 65% of the total amount.

 

In a separate report, the administration said the two cargoes of US corn also arrived at the ports of Taizhou and Ningbo in the province, which have been stored at state grain silos there.

 

China, the world's second-largest corn consumer, has bought more than two million tonnes of US corn so far in the year to replenish its reserves after Beijing ran down its stocks to cover deficits and tame record corn prices as demand outpaced its production growth.