China will tap global markets for more top-quality wheat after rains during last month's harvest damaged some 10 million tonnes, over 8 percent of the annual output of the world's top producer of the grain. China has already snapped up wheat from the United States and France, and more buying will drive up international prices of milling-quality grains used for making bread and cakes.
The need for more imports into China will exacerbate tight supplies for the best wheat due to crop-damaging weather in the world's top exporters the US, Russia and Ukraine. "Rains have damaged wheat quality in southern parts of Henan and also parts of the province of Jiangsu," said Ma Wenfeng, an analyst at Beijing Orient Agri-business Consultant Co.
"A lot of the wheat has started to germinate and can no longer be used for milling and is only suitable for animal feed." Henan is China's biggest wheat growing area, producing around 31 million tonnes a year, while Jiangsu's output is about 11 million tonnes. Some 10 million tonnes of wheat has been damaged in Henan and is not good enough quality to be kept in national reserves, state think-tank the China National Grain and Oils Information Center has said.
Higher imports of top-grade wheat by China would drive up premiums for protein-rich spring wheat traded on the Minneapolis Grain Exchange and hard red winter wheat on the Kansas City Board of Trade. While Chinese flour mills will be keen to buy high-quality Canadian and US spring wheat, state-run Sinograin will focus on soft red winter wheat which can be blended with domestic grains to make flour, traders said.
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