SASKATOON – After a two-year hiatus, it looks like China is back to buying Canadian wheat.
Just six weeks into the new crop year, Canada has sold 700,000 tonnes of wheat to China.
“We’ve had a steady program in July and August,” said Canadian Wheat Board commissioner Gordon Machej, who looks after markets in Asia for the board.
After minimal sales to China in April, May and June, Machej said China bought 450,000 tonnes of hard red spring wheat in July and another 700,000 tonnes in August.
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Canada’s total wheat sales to China in all of 1993-94 were 1.9 million tonnes. Sales in August 1993 were 187,000 tonnes.
According to the Canadian Grain Commission, exports of wheat ending Sept. 4 were 2.34 million tonnes.
Machej said in an interview from Winnipeg that Chinese sales for September look promising as well. They won’t be as high as August, he said, but will likely equal July totals.
Three Chinese vessels are loading on the West Coast and another two are waiting, he said.
Historically, China has favored Canada’s lower grades of hard red spring wheat, specifically 3 CWRS.
It’s no coincidence China is buying that grade again in this buying spree. Canada’s nearly 12 million tonnes of stocks are overloaded with 3 CWRS left from the 1991 and 1992 crops.
“It’s a very nice fit,” Machej said.
He declined to forecast total sales for this crop year, but said prospects are good for ongoing business throughout the year with China. “It looks like demand will be higher.”
That is the same forecast made by the International Wheat Council in its latest market report.
The IWC said China’s wheat imports fell to a 16-year low of 4.6 million tonnes in 1993-94, but are expected to rise to between 6.6 and 7.6 million tonnes this crop year.
Even though the IWC said China may have booked as much as half its forecast imports from Canada, the Chinese are shopping the market.
China purchased 250,000 tonnes of soft red winter from the United States at the end of July, with the help of a $42-per-tonne (U.S.) subsidy under the Export Enhancement Program.
Last week, a Chinese diplomatic delegation to France was negotiating to buy between one and 1.5 million tonnes.
But a drought in France, and lower production due to the set-aside mandated by the reformed Common Agriculture Policy, means the French may not be able to sell all that China wants to buy.
