Low global wheat stocks bolster China's role, report

By staff reporter

- Last updated on GMT

Related tags: Wheat, International trade, United states, China

China’s position as a global supplier of wheat has strengthened particularly due to the fact that worldwide stocks are at their lowest levels for 25 years, according to a new report from Leatherhead Food Research.

The market analysts in a new publication, China – A growing global power in food supply, ​report that output in 2008 of various cereals and grains in the country was in excess of 400 million tonnes.

The Leatherhead researchers claim that China now occupies a significant role within the global wheat market following poor wheat harvests elsewhere, which have led to a tightening in supply and rising prices: “The situation has been exacerbated by a steady increase in global demand, which rose from 625 million tonnes in 2005/2006 to over 640 million tonnes for the 2008 to 2009 period,”​ state the analysts.

During 2008 to 2009 Chinese wheat production amounted to an estimated 113 million tonnes, increasing from just over 96 million tonnes in 2004-2005, and exports have risen sharply in recent years, they add, mainly as a result of this global shortage.

However, said the Leatherhead analysts, due to high levels of domestic demand, China does not rank as one of the world’s leading exporters of wheat at present: “China exports around 3 million tonnes (which equates to almost 3 per cent of total output) mainly to other Asian countries,”​ state the researchers.

And the researchers note two factors holding back an escalation of wheat exports from the country: the recent imposition of export tariffs by Chinese authorities keen to cut producers' reliance on foreign markets and the impending threat of drought on wheat production levels in 2009 to 2010.

They explained that much of the recent increase in Chinese wheat production can be attributed to the rising numbers of farmers planting grain instead of labour-intensive crops: "At present China accounts for around 16 per cent of global wheat output, which compares with 20 per cent for the EU countries, 11 per cent for India and 9 per cent for the US,”​ states the report.

In terms of wheat flour, added he market analysts, China is currently the fifth largest exporter worldwide, with the country exporting an estimated 850,000 tonnes of wheat flour in the period 2008 to 2009. This was “up by almost a third (32 per cent) from 645,000 tonnes in 2006 to 2007.”

Kazakhstan is presently the world’s leading exporter of wheat flour, supplying 1.85 million tonnes, ahead of the EU region at 1.35 million tonnes, Argentina and Turkey both at 1.2 million.

Related topics: Markets

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