By Naveen Thukral and Peter Hobson
SINGAPORE/CANBERRA (Reuters) – China has delayed imports of up to 600,000 metric tons of mostly Australian wheat and offered some of these cargoes to other buyers as ample domestic supplies reduce demand in the world’s top buyer of the grain, two trade sources with direct knowledge of the matter said.
China accounted for 6% of global wheat imports in the year to June 2024, according to U.S. Department of Agriculture data. With its outsized role in the market, the country’s lower intake may pressure benchmark Chicago wheat prices, which remain below $6 a bushel after falling to a four-year low of $5.14 in July. [GRA/]
The country is well-stocked after plentiful corn and wheat harvests and to support local prices that have fallen as a result it does not want new wheat to arrive until as late as April, the sources said.
One of the sources, a Singapore-based trader at an international company that sells U.S. and Australian wheat into Asia, said he had direct knowledge of four shipments carrying around 240,000 metric tons, three from Australia and one from Canada, that Chinese buyers were trying to resell in Southeast Asia.
The trader said he had heard from other traders that around 10 ships in total from Australia and Canada were being delayed resold, each carrying around 60,000 tons of wheat.
“China has postponed the delivery time of several wheat cargoes that were to be shipped from Australia and Canada,” he said.
“There are ample supplies in the Chinese market and their local prices have fallen.”
A source at a major grain trader in Australia said he had direct knowledge of two wheat shipments booked for delivery to China in February, one of which has been delayed to April.
“The other is sailing, but the buyer plans to divert a chunk (of the grain onboard) to Thailand.”
China has delayed or redirected a total of eight to 10 Australian shipments that were booked for delivery in January or February and has booked no shipments for March, he said.
“China just doesn’t want anything showing up until April,” he said.
Early last year, Chinese wheat importers cancelled or postponed about 1 million metric tons of Australian wheat cargoes as growing world stockpiles dragged down prices.
Still, in the first three months of 2024, China imported 1.7 million tons of wheat from Australia, down from 2.5 million tons in the same period a year earlier, and 923,000 tons from Canada, up from 783,000 tons a year earlier, according to Chinese trade data accessed using Trade Data Monitor.
Australia begins each year with freshly harvested wheat and has been China’s main first-quarter supplier in recent years.
China’s state-run COFCO, which is the importer of most of these delayed or redirected cargoes, is paying the costs of delaying shipments, including charges to hold back grain, and will take any gain or loss from reselling grain, the source in Australia said.
COFCO did not immediately reply to an email from Reuters requesting comment.
“China wants to protect its farmers. After a good corn crop, they have more than enough corn for feed. So now all of a sudden the wheat they were importing for feed and flour has been wound back to just flour,” the trader in Australia said.
China’s state stockpiler Sinograin said on Monday it plans to add new stockpiling sites in northeast China to expand purchases of domestic corn harvested in 2024.
(Reporting by Peter Hobson and Naveen Thukral; additional reporting by Mei Mei Cho in Beijing; Editing by Christian Schmollinger)
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