China will boost wheat imports in the coming year to meet domestic food demands.
The world's largest consumer and producer of wheat is expected to purchase six million tons in the next twelve months, up from just over four million tons the previous year. This was reported by the China National Grain and Oils Information Centre, the government forecaster.
Additionally, an Argentine minister stated that China will sign an agreement next week for the supply of Argentine pork to China.
China, which is already the world's largest importer of soybeans, is also buying substantial amounts of corn and cotton from the US. China will likely increase purchases from the US next year to help fulfill obligations under the Phase 1 trade deal. In terms of wheat, China is encouraging purchases from France and Lithuania, while Russia and Kazakhstan are willing to sell more. The US Department of Agriculture also estimates Chinese wheat imports at 6 million tons for the coming year.
The wheat acreage in China is shrinking because the government is encouraging farmers in dry northern regions to switch to other crops to prevent excessive use of groundwater and to keep it available for cultivating other crops. There is also increased demand for wheat in animal feed.
Corn prices are near their highest levels in five years, driven by recovering demand for pig and poultry feed. In some areas, corn is already more expensive than wheat, which motivates more farmers to use wheat. Wheat used in animal feed is likely to increase by 4.5 million tons to 20 million tons in the coming year.
Furthermore, Argentina is working on a revised agreement with China that could pave the way for Chinese investments in the Argentine pork industry, said the Argentine Deputy Minister of Trade and Investment Promotion to the British news agency Reuters.
This could eventually lead to Argentine pig farms supported by China. In that case, Argentina would no longer export live pigs for slaughter to China on a limited scale but frozen pork.
Deputy Minister Pablo Sivori said a contract with China could be signed in the coming weeks. The country’s Foreign Minister, Felipe Sola, said earlier this month that Chinese investments could help Argentina massively increase pork production.
Argentina is already a supplier of beef to China but is a small player on the global pork market. According to official data, it produced 630,000 tons of pork in 2019, of which only 34,000 tons were exported.