December 13, 2012

China has re-emerged as a top buyer of Australian crop as it imported 2.39 million tonnes of Australian wheat in 2011-12, more than four times from the previous season's purchases.

According to the Australian Bureau of Statistics, China was Australia's fourth biggest buyer of wheat last season - its highest ranking since 2004-05, when it was the second biggest customer, taking 1.32 million tonnes.

China's previous biggest purchase of Australian wheat was in 1995-96 when it took 2.23 million tonnes.

Figures by the USDA indicate China is almost exclusively buying Australian wheat. The USDA's November World Agricultural Supply and Demand Estimates (WASDE) report has assessed China's imports during 2011-12 and 2012-13 at 2.93 million tonnes and 2.5 million tonnes, respectively.

WASDE reports show China has produced wheat crops ranging between 108 million tonnes and 118 million tonnes during the past seven years - almost double the next biggest producer, the US.

Cargill Australia's head of sales and marketing John Arrigo said China was an opportunistic market, largely buying Australian Standard White type wheat for human consumption and to feed to livestock. "It always comes down to price and freight compared with wheat from other origins," he said.

"They have increased their wheat production themselves. So their purchases depend on their own production. The Chinese have always been very good at picking where the price is going to go. They often buy in stocks to keep in reserve."

During the 1980s to mid-1990s, China regularly imported between six and 16 million tonnes of wheat, equivalent to about 10-15% of its crop. Since then, it has become more self-sufficient and rarely imported more than two million tonnes of wheat annually. But now, China is struggling to keep up with its population.

Arrigo said China now had a larger middle class with higher living standards. He said they were demanding more pork and chicken in their diets, which meant more livestock feed needed to be imported. Their diets were also expected to become more westernised.