Caixin
Aug 22, 2020 06:51 PM
ECONOMY

As China Looks to Improve Food Security, Wheat Imports More Than Double

China imported 4.28 million tons of the grain from January to July, up 116.3% year-on-year.
China imported 4.28 million tons of the grain from January to July, up 116.3% year-on-year.

Fresh data showed China’s wheat imports more than doubled in the first seven months of the year from the same period last year due to increasing domestic demand for high-quality wheat, a spokesman for the Ministry of Commerce said.

The surge in wheat purchases from overseas is another sign that China is taking food security more seriously as flooding has ravaged part of the country and the leadership is pushing a campaign to reduce food waste.

As the world’s largest consumer of wheat, China imported 4.28 million tons of the grain from January to July, up 116.3% year-on-year, ministry spokesman Gao Feng said at a briefing Friday.

The amount has already surpassed the 3.48 million tons of wheat that the country imported last year, according to data from the Ministry of Agriculture and Rural Affairs.

“For several years, imported wheat has made up around 2% to 3% of China’s total wheat consumption, most of which is high-quality wheat,” Gao said.

The positive outlook for wheat prices in China has given commodities traders an incentive to buy more from overseas to try to cash in on rising domestic prices in the future, an industry insider said. In addition, a jump in corn prices, which are up 7.8% year-on-year, has pushed more livestock farmers to switch to feeding their poultry with wheat, which has also boosted domestic demand.

Anticipating a surge in prices in the coming months, Chinese farmers have also been storing more wheat themselves instead of selling it on the market, said Chinese Academy of Social Sciences researcher Li Guoxiang. That has led to a 18% drop in the amount of the commodity purchased by China’s National Food and Strategic Reserves Administration this year, a regular move conducted by the government that aims to keep wheat prices and the amount available on the market steady.

Recent heavy rainfall in southern China has also worsened concerns about the country’s food production. China is in the throes of one of its most devastating flood seasons in decades, which has damaged as much as 6,000 hectares (14,826 acres) of farmland this summer, with one-fifth of the farmland reporting no harvest, the country’s emergency management body said Tuesday.

 Read more 

Five Things to Know About the Yangtze’s Devastating Floods

President Xi Jinping has launched a nationwide campaign calling to minimize food waste in an effort to safeguard the country’s food security. In response, the central Chinese city of Wuhan has rolled out a dining practice called N-1, which is designed to limit the number of dishes order to the number of diners minus one.

China has an import quota of 9.64 million tons for wheat this year. Imports entering the country within the quota are subject to a 1% tax, while any amount of wheat imported beyond the quota can be taxed at rates as high as 180%.

Contact reporter Lu Yutong (yutonglu@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)

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