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China Crude Imports Rise as Drought Boosts Diesel Use

Feb. 14 (Bloomberg) -- China, the world’s biggest energy consumer, increased net crude-oil imports to the highest in four months in January as demand for diesel to operate irrigation equipment in drought-stricken regions rose.

Net imports reached 21.5 million metric tons, or 5.1 million barrels a day, data from the Beijing-based General Administration of Customs showed today. That’s the highest since September. China paid an average $88.74 for each barrel it bought overseas, up from $83.13 in December.

Farmers in the world’s largest grains-consuming nation stepped up use of energy-intensive equipment to pump water into wheat fields as a dry spell cut production in provinces including Shandong, Jiangsu, Henan, Hebei and Shanxi. Demand for fuels also rose ahead of the Lunar New Year festive season that began in the first week of February.

“Fuel demand rose as farmers need more fuel amid the drought,” Li Yujing, an analyst at state-backed China International Chemical Consulting Corp., said by telephone in Beijing. Increased traveling before the Chinese New Year also boosted oil consumption, he said.

About 42 percent of the total area planted with wheat in China’s eight major producing provinces has been hit by a dry spell that may last into the spring, Minister of Agriculture Han Changfu said this month. Refiners in China including PetroChina Co. are raising oil-processing volumes to guarantee diesel supply to farmers.

China Petrochemical Corp. is producing and storing diesel at a record pace and will increase oil processing volume by 2.4 percent this month from January, the nation’s biggest refiner said on Feb. 12.

The country’s net imports of fuel, including gasoline, diesel and kerosene, totaled 1.71 million tons last month, according to today’s data. Net purchases reached a 29-month high of 2.07 million tons in December.

Exports of coal totaled 1.43 million tons in January. The customs data today didn’t include coal import volumes.

To contact the reporter on this story: Baizhen Chua in Beijing at bchua14@bloomberg.net

To contact the editor responsible for this story: Clyde Russell at crussell7@bloomberg.net.

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