According to reports, eight to ten Australian shipments that were originally planned for China in January or February have been delayed or rerouted, and no additional shipments are planned for March.
According to two trade sources with direct knowledge of the situation, China has postponed the import of up to 600,000 metric tons of wheat, primarily from Australia, and offered some of these cargoes to other customers as the world’s largest importer of the grain experiences a decline in demand due to abundant domestic supply.
According to figures from the US Department of Agriculture, China was responsible for 6% of the world’s wheat imports in the year ending June 2024. The nation’s reduced intake might put pressure on benchmark Chicago wheat prices, which are still below $6 per bushel despite dropping to a four-year low of %5014 in July due to its disproportionate market share.
According to the sources, the nation does not want new wheat to come until as late as April since it is well-stocked following abundant corn and wheat harvests and wants to support local prices that have dropped as a result.
A trader in Singapore who works for a multinational corporation that supplies wheat to Asia from the United States and Australia claimed to have firsthand knowledge of four shipments totaling about 240,000 metric tons-three from Australia and one from Canada – that Chinese buyers were attempting to resell in Southeast Asia.
The broker claimed to have learned from others traders that ten ships, each carrying about 60,000 tons of wheat, were being delayed in their resale from Australia and Canada.
“China has postponed the delivery time of several wheat cargoes that were to be shipped from Australia and Canada”, he stated.
“There are ample supplies in the Chinese market and their local prices have fallen”.
Chinese importers of wheat
Two wheat cargoes scheduled for delivery to China in February have been postponed to April, according to a source at a significant Australian grain broker.
“The other is sailing, but the buyer plans to divert a chunk (of the grain onboard) to Thailand”.
According to him, China has scheduled no exports for March and has postponed or rerouted eight to ten Australian cargoes that were scheduled for arrival in January or February.
“China just doesn’t want anything showing up until April”, he stated.
Around 1 million metric tons of Australian wheat cargoes were cancelled or delayed by Chinese importers early last year as rising global wheat stocks drove down prices.
However, according to Chinese trade data accessible through Trade Data Monitor, China purchased 1.7 million tons of wheat from Australia in the first three months of 2024, compared to 2.5 million tons during the same time last year, and 923,000 tons from Canada, compared to 783,000 tons during the same period last year.
Australia, which has been China’s primary first-quarter supplier in previous years, starts each year with freshly harvested wheat.
According to the Australian source, China’s state-run COFCO, which imports the majority of these delayed or misdirected cargoes, is covering the expenses of postponing shipments, including fees for holding back grain, and will keep any profits or losses from reselling grain.
