context: The summer grain harvest output grew 2.4 percent y-o-y, despite the worst drought in a decade striking critical wheat-producing Henan as a mid-June heatwave scorched much of the PRC granaries. Imports were the second-highest on record in 2023, reaching 162 million tonnes, with corn, wheat and soybeans above the tariff-rate quota. Wheat imports were up 15.5 percent y-o-y and corn import forecasts were revised up to a near-record high in April 2024.
The PRC's 2024 wheat import forecast has been increased to 14 million tonnes by the USDA. This far exceeds the TRQ (tariff-rate quota) of 9.36 million tonnes, marking the highest import level since the 1990s, reports Grain and Oil Daily.
Wheat imports for January-May topped 8.09 million tonnes, a 12 percent y-o-y increase, according to GAC (General Administration of Customs) data. The current forecast for 2025 stays high at 12 million tonnes.
With the USDA forecasting an ample global grain supply for the year, global prices have plummeted, putting further pressure on PRC producers.
- domestic vs. import grain prices
- wheat
- C¥2500/tonne domestic
- C¥1,648.44/tonne US soft red winter wheat
- C¥1,922.58/tonne US hard red winter wheat
- corn
- ~C¥2,500/tonne domestic
- C¥2,400/tonne domestic futures
- C¥1,990/tonne import
- cheaper imported grains exerting downward pressure on domestic prices
- ~C¥2,500/tonne domestic
- barley
- C¥2900/tonne domestic
- C¥2230/tonne import
- sorghum
- C¥3800/tonne domestic
- C¥2180/tonne import
- wheat
On the other hand, there is good news for pig producers and beef consumers, says Grain and Oil Daily.
- pig industry
- hog farming has been profitable for three consecutive months
- average price approaching C¥20/kg
- C¥20.4/kg in Guangdong
- current pig farming profitability C¥460/head
- average price approaching C¥20/kg
- hog farming has been profitable for three consecutive months
- beef prices
- US ground beef jumped 6.3 percent across June to C¥84/kg
- historic high
- led to 38 percent increase in beef import prices in Japan
- regular beef bowl rose to C¥20
- PRC third-largest importer of US
- accounts for only 5.7 percent of PRC beef imports
- minimal impact on domestic beef prices
- US ground beef jumped 6.3 percent across June to C¥84/kg