China makes big US wheat purchase
The Agriculture Department today reported that Chinese buyers have purchased 340,000 metric tons, or about 12.5 million bushels, of U.S. hard red winter (HRW) wheat for delivery in the 2020-21 marketing year.
U.S. Wheat Associates (USW) President Vince Peterson said the announcement “is very good news for U.S. wheat farmers. This is a significant purchase volume and the largest since China implemented retaliatory tariffs on U.S. wheat in March 2018.
“This purchase falls under China’s 9.64 million metric ton tariff rate quota (TRQ). China has agreed to work toward filling its TRQ for wheat imports. As USW has noted, if the changes are in fact implemented, and Chinese millers can respond to market signals, most of the TRQ should be used. U.S. wheat farmers are in a good position to help fill the TRQ given current export prices, relatively low freight rates and the ready supply of the wheat classes China needs.
“USW appreciates the efforts of both the U.S. and Chinese governments to reach the phase one trade agreement that has helped re-open the door to U.S. wheat imports by China. We believe that China’s flour millers and growing baking industry want the opportunity to purchase high-quality U.S. wheat classes again, and we hope this is only the beginning of a new, more productive trade relationship.”
National Association of Wheat Growers (NAWG) President and Cass City, Mich., wheat farmer Dave Milligan said, “With the coronavirus pandemic adversely impacting domestic and international economies, China’s purchase of American wheat is welcomed news.
“NAWG also hopes that this is just one of several steps toward implementation of phase one of the new U.S.-China trade deal. China is one of the largest buyers of U.S. wheat, and we hope that the new U.S.-China trade deal will restore the export opportunity that was building in China for American wheat farmers.”
–The Hagstrom Report