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China makes largest winter wheat purchase since 2004

Written June 18, 2012

Crop losses could further increase China imports, according to USDA

China has purchased 110,000 metric tons of soft red winter wheat from the U.S., the Asian country's largest purchase of that type of wheat since January 2004 and likely due to a smaller domestic crop, according to the U.S. government. The wheat will probably be used for food, and is not expected to cut into China's U.S. corn purchases.

China may see its first year-on-year decline in wheat production in a decade following drought in a key wheat growing area and the spread of yield-cutting disease, say analysts. The current U.S. Department of Agriculture estimate for a 120-million-metric-ton Chinese wheat crop may be overstated by 10 million metric tons or more. Crop losses could spur China to import up to 5 million metric tons of wheat this season from all sources, double the current USDA forecast for the 2012–2013 season and up from 3 million metric tons in 2011–2012, said traders.

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