A sharp decline in China’s domestic wheat and grain supplies has been reported after China and the US started to trade polemics and then tariffs targeting each other’s exports.
Beijing singled out beans, wheat and other agricultural produce exported from the US and slapped on retaliatory duties in a tit-for-tat move to counter US President Donald Trump’s tariffs on Chinese exports worth hundreds of billions of dollars.
Yet China seems to be hard put to fill the supply gap after wheat imports from the US nosedived. In fact, its own farms produced 18.36 million metric tons less wheat year on year during the first seven months, dragging down total output during the period to just 37 million tons, according to the State Grain and Reserves Administration.
For instance, the central province of Henan, a major producer, handed in just 7.79 million tons of wheat.
Some farmers have reportedly shifted from cultivating wheat to other more profitable crops. Coupled with this year’s widespread drought, this trend has led to lower output.
The shrinking output has soon raised market concerns over whether China can meet domestic demand for wheat, which accounts for 40% of its grain consumption.
This has also sparked speculation at home and abroad that China might have to expand imports from the US again.
But industry insiders on Wednesday said the slide was due to domestic factors such as Beijing’s bid to tap mammoth stockpiles of wheat purchased in past years.
It is still estimated that there are 126.8 million tons of wheat in state reserves this year, said a report on chinagrain.cn. That compares with annual consumption of about 100 million tons in China, Reuters reported.
State media also note that there was no need to look for US crops to compensate for declining domestic supplies, as they say, Chinese people nowadays are consuming “less staple food” due to gradual changes to their diets.
“Consumers’ diets are becoming more healthy and balanced, which will reduce the demand for staple foods such as wheat,” the Global Times cited an expert as saying.