by PressChina is buying up new crop barley from France and Canada
China is buying up barley: the reasons for the rush on the grain market
The rush that began in the grain market last year continues. China is now buying barley from Canada and France, with forward purchases already referring to the new crop. The reason for such interest in products from those countries was the ban on shipments from Australia.
The need to import large quantities of barley in China was caused by a sharp increase in the number of pigs, which recovered earlier than expected after the epidemic. Until recently, the country was buying barley from Australia, but last year at the diplomatic level, the countries had a disagreement that affected trade relations. As a result, the duty on supplies from Australia rose to 80.5%, forcing Chinese farmers to look for other importers. The choice fell on France and Canada, as for the latter, the PRC has reserved a significant proportion of the new crop. In this case, one of the reserves has more than 1 million tons of grain. France has signed a contract to sell 1.8 million tons until June this year, and according to traders, it is not ruled out to buy another 1 million tons in the future. Moreover, last period imports from France to China amounted to only 1.5 million tons. In addition, some of the products will be supplied from Ukraine.
According to preliminary agreements, the grain will go to China between July and September.
This situation caused the rise in prices for the new barley crop from France. The fact is that suppliers have already closed the share of large advance sales in the PRC, which took place at the end of last year. As a result, the cost of feed barley has increased significantly compared to the prices for milling wheat.
The growth of interest in the new crop suggests that demand in China will continue to increase, and it is not short-term, as initially predicted by experts.
First of all, China needs imports of barley of the current season crop for feeding purposes. In addition, the country buys grain for malt production.
While the grain purchased from France and Canada will go to feed animals, China will wait for its own corn harvest to partially cover the deficit. As for shipments from Australia, for now, they will not carry the same volume as before.
According to analysts, increased barley consumption and high barley prices on the Chinese market could cause record grain shipments to the country. According to forecasts, grain imports to China in the current season will exceed 10 million tons.