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China makes ample purchases of French and Ukrainian feed grains: Refinitiv Agriculture
13 December 2021, 11:34
Chinese buyers made sizable purchases of French wheat and barley, Ukrainian corn and barley last week, Refinitiv Agriculture reports.
According to market sources, although the total volume of purchases is yet to be known, importers have received at least several hundred thousand tonnes of French and Ukrainian origins.
Other sources added that Chinese buyers also made large purchases of Australian feed wheat, which also equalled at least several hundred thousand tonnes.
"These purchases point to China's persistent key grain import needs despite the country's new crop maize and challenges in the pork industry, and further demonstrate the willingness of buyers to take advantage of falling world grain prices," the report reads.
Wheat futures soared to a nine-year high in the United States and a record peak in Europe last month, bolstered by concerns over rain damage to Australia's crop and Russian export restrictions, before falling sharply from last week.
According to six traders, Chinese buyers have ordered 6 to 10 ships, or potentially up to 600,000 t, of French wheat for shipment mostly in January-March 2022. This followed smaller sales of French wheat in mid-November, two or three vessels for shipment in December, they said.
French wheat will probably be used mainly for feed purposes, although some consignments may be utilized for milling needs, traders added.
"French wheat now looks attractive to the Chinese in price after falling from its peaks. China is also believed to have been making large purchases of wheat from Australia recently, as China's economic recovery has triggered demand," said a European trader.
Traders say recent sales will bring total French wheat exports to China in 2021/22 to 2 mln t, surpassing the already large volumes of the past two seasons.
The Chinese buyers are also making forward purchases of barley crop 2022 in France and Ukraine.
"Around four vessels with French barley and up to 10 consignments of Ukrainian barley have been booked for shipment mainly in July and August next year, according to at least four traders, although some have said the purchases could be additional deals to be sourced from any country," Refinitiv reports.
According to traders, Chinese buyers' interest in French wheat and barley persisted, although no new deals were reported as of early Friday, Dec. 10.
As for maize, Chinese buyers have ordered consignments from Ukraine for January-April shipment, four sources said. Estimates of volumes ranged from a few to 10 or more shipments, with one source reporting a total of as much as 1 mln t.
This week, traders estimated Ukrainian corn with delivery to China in January-February 2022 at around 270-273 USD/t FOB.
"Similar to the preceding purchases last month, Ukrainian corn was more expensive than supplies from the US. China has traditionally been a major importer of Ukrainian corn and barley. Traders estimate Ukraine could ship 5 mln t of new crop corn to China 5 mln t of the expected record crop in 2021 (about 40 mln t)," the experts said.
The USDA improved its projection of wheat export from Ukraine in 2021/22 to 24.2 mln t.
Learn more: TOP 14 Wheat Exporters From Ukraine in 10M 2021
Wheat export from Ukraine in 2021/22 was limited to 25.3 mln t. The Memorandum of Understanding was signed by the Agrarian Ministry and grain market participants.
China's corn import in 2021/22 is projected by the USDA to total 26 mln t.
