China to Import Most Wheat in Seven Years to Ensure Food Supply

(Bloomberg) -- China will boost wheat imports in the coming year to secure domestic food requirements and is likely to increase purchases from the U.S. to help meet commitments under the phase one trade deal.

The world’s largest consumer and producer of wheat is set to buy 6 million tons in the 12 months starting June, up from just over 4 million tons in the previous year, according to the China National Grain and Oils Information Center, the government forecaster. That would be the highest since 2013-14.

China, also the top global soybean importer, is already buying hefty amounts of corn and cotton from the U.S. to fill domestic needs and try to satisfy pledges under the trade deal. In terms of wheat, the Asian country is boosting purchases from France and Lithuania, while Russia and Kazakhstan are willing to sell more, the center said. The U.S. Department of Agriculture also estimates wheat imports at 6 million tons in the coming year.

China has been under pressure to fulfill its annual grain import quotas, which include corn and rice, under WTO commitments. The country lost a dispute last year brought by the U.S. which argued the quotas were not fully utilized.

Wheat acreage in China has been shrinking as the government encourages farmers to shift to other crops in the dry northern region and prevent excessive usage of underground water, while other growers are turning to vegetables in search of higher profits, the center said.

There’s more demand for wheat in animal feed too. Corn prices are around five-year highs, driven by recovering demand for hog and poultry feed, and corn is already more expensive than wheat in some areas, spurring more farmers to use wheat. Wheat used in animal feed is likely to rise by 4.5 million tons to 20 million tons in the coming year, it said.

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With assistance from Bloomberg