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China boosts wheat imports from U.S.

Published on December 31, 1969 3:01AM

Last changed on September 9, 2013 7:06AM

Carl Sampson/Capital Press
A wheat field basks in the evening sun near Sublimity, Ore.

Carl Sampson/Capital Press A wheat field basks in the evening sun near Sublimity, Ore.

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Weather damage to China's wheat crop has opened export opportunities for wheat producers in the Pacific Northwest and throughout the U.S., according to wheat industry sources.

China is both the top consumer and grower of wheat in the world, meeting roughly 95 percent of its demand for the commodity with domestic production, said Blaine Jacobson, executive director of the Idaho Wheat Commission.

This season, however, due to frost and rain damage, China forecasts it will have to import as much as 10 percent of its wheat, Jacobson said.

"Even a 5 percent swing is a lot of wheat in China," Jacobson said. "They do buy out of the Pacific Northwest. They like soft white and hard red spring."

A Chinese trade team is scheduled to visit Idaho, Oregon and North Dakota Aug. 4-13, with a stop in Idaho Falls planned Aug. 7-8.

Steve Wirsching, vice president and director of the U.S. Wheat Associates West Coast office in Portland, Ore., said China has already stepped up its imports in response to its crop problems. Last season, he said, China imported 800,000 metric tons of U.S. wheat. This year, the country has already purchased 2.8 million metric tons, he said. In its report July, he noted USDA increased its estimates of Chinese global wheat imports from 3.5 million metric tons to 8.5 million metric tons. That increase would rank China second among world wheat importers, compared with 16th last season.

"If the U.S. could get a pretty good share of that, it would be fantastic for us, and it looks very promising," Wirsching said.

Thus far, Wirsching said China's U.S. imports have mostly been soft red wheat out of the Gulf of Mexico ports, but the country has also imported 176,000 metric tons of hard red spring wheat and 110,000 metric tons of soft white wheat from the Pacific Northwest.

In general, China's interest in U.S. wheat has increased during the past two years due to its population's growing taste for western products that require high-quality U.S. varieties, said U.S. Wheat Associates spokesman Steve Mercer. Mercer said the Chinese tend to blend their imported wheat with domestically produced wheat. Mercer said China also enjoys a freight rate advantage out of the PNW ports compared with the Gulf.

Grace, Idaho, grain farmer Craig Corbett, who follows markets closely, believes news of China's increased demand provided much-needed good news at a time when U.S. wheat prices were declining. He's also pleased by the timing of the arrival of the Chinese trade team in the U.S.

"If the trade team likes what they see and knows there's a viable supply of quality wheat, that's definitely going to help," Corbett said.

However, he's disappointed the markets reacted with a short-term price increase and then softened, but didn't continue to rise.

"We didn't get the kind of results about that kind of news that would make me feel really good and bullish about it. I want to see follow-through, not just a one-time blip," Corbett said.


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