China has temporarily left the world wheat market but will be back soon, probably for good, says an American agricultural economist.
Scott Rozelle of the University of California said falling Chinese stock levels and reduced wheat plantings leave China little choice.
“They are going to gradually come up,” said Scott Rozelle, an agricultural economist with the University of California.
In good years, Chinese imports of wheat might reach nine million tonnes – the maximum before high tariffs kick in – and four to five million tonnes will probably become its long-term average.
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China’s population is increasing so there will be more demand for food, Rozelle said. China’s agricultural productivity may increase, but acreage will probably be cut as irrigation water shortages force farmers to cut wheat out of their rotations in favour of higher value crops, Rozelle said.
But import demand is unlikely to increase past five million tonnes per year.
Chinese wheat consumption on a per capita basis is high and as the people get richer, they will probably eat more meat and less grain.
The best news for Canadian farmers is that Chinese consumers will demand high quality and special characteristic wheats.
“If the world can take advantage of that, there will be lots of opportunities,” said Rozelle.
