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China Daily Website

Rising demand drives 721% hike in wheat imports last month

Updated: 2013-12-27 09:23
By Zhong Nan ( China Daily)

To keep the staple food supply and demand in balance, the Chinese government set a new goal earlier this week that it must maintain a self-sufficiency rate of 95 percent for grains, including rice, wheat and corn. For rice and wheat, the self-sufficiency rate should be even higher to ensure absolute safety of the domestic food supply.

However, the nation's surging wheat imports have caused some consternation that China's deepening reliance on the international market may hike global wheat prices in 2014.

Li Guoxiang, deputy director of the rural development institute at the Chinese Academy of Social Sciences, said that in comparison with the Republic of Korea and the United Kingdom, China's expenditures on grain imports equal only 3 percent of its foreign currency spending at the moment, which is lower than the international level.

"Currently, the supply of staple grain is in a relatively surplus position in the world market," Li said. The slightly lower self-sufficiency rate and higher wheat imports do not mean that the country's grain security is being threatened by declining domestic wheat output, he said.

Higher domestic prices

"Pushed by fixed government minimum purchase prices, soaring labor and fertilizer costs, the price of Chinese wheat is set higher than international prices," said Ding Lixin, a researcher at the Chinese Academy of Agricultural Sciences.

According to the US Department of Agriculture, the average US wheat price was $280 per ton on Tuesday, compared with $441 per ton at China's Zhengzhou Commodity Exchange

The CNGOIC adjusted up its previous forecast of China's wheat imports from 7.5 million tons to 8 million tons for the 2013-14 crop year.

Ding said China also is selling flour and processed products, like flour, noodles, biscuits and bread, to countries such as Thailand, Vietnam, the Democratic People's Republic of Korea and Mongolia. COFCO, China's largest food processor, manufacturer and trader, is the only Chinese company tasked with exporting wheat and related products.

Thanks to a well-developed food-processing industry, China exported 157,703 tons of flour to the Democratic People's Republic of Korea and 338,000 tons of flour to Mongolia in 2012, according to a report by the Chinese Academy of Agricultural Sciences.

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