China May Boost Wheat Imports to Curb Prices, Shanghai JC Says
China, the world’s biggest wheat consumer, may increase imports to boost stockpiles and help curb record gains in local prices, Shanghai JC Intelligence Co. said.
Wheat traded in central Henan province, the biggest growing region, rose 3.4 percent this month to 2,760 yuan ($451) a metric ton, according to data by China National Grain & Oils Information Center. The government may sell from stockpiles and ask state-owned companies to import additional supply, Shanghai JC analyst Shi Wei said by phone today.
A smaller harvest this year and rising demand during the mid-autumn holidays last week helped boost prices, according to Shi. Imports may total 7.5 million tons in the year that started June 1, Grain.gov.cn said on Sept. 23. That compares with 9.5 million tons estimated by the U.S. Department of Agriculture. Last year’s purchases were 3 million tons.
“China’s wheat is more expensive, so there is always strong motivation to import,” Shi said. “Only the government can decide whether to sell domestic stockpiles to curb prices and when to buy imports.”
Wheat for delivery in December was little changed at $6.59 a bushel on the Chicago Board of Trade at 1:40 p.m. in Beijing. U.S. wheat costs about 2,375 yuan a ton after clearing Chinese duties, according to Cngrain.com. Futures on the Zhengzhou Commodity Exchange traded at 2,850 yuan a ton.
Under obligations when joining the World Trade Organization, China may issue as much as 9.6 million tons of import quotas in one calendar year, according to the National Development and Reform Commission.
With 10 percent allocated to private industry, the majority is held by the government and only used when it decides to import, according to the commission.
To contact Bloomberg News staff for this story: William Bi in Beijing at firstname.lastname@example.org
To contact the editor responsible for this story: Brett Miller at email@example.com