CHINESE state officials are warning that the country could be on the verge of its “worst winter harvest in history” following heavy flooding during planting late last year.
The confessions have raised eyebrows among grain industry analysts as they run counter to China’s general official estimates, which international experts generally consider to be firmly optimistic.
“We don’t usually see China and say they’re having production issues or they’re low on inventory, even when their buying habits suggest they are, so to see them come out and say it’s unusual,” Thomas Elder said. Market analyst Andrew Whitelaw.
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“The timing is really interesting for a major grain importer as the world is experiencing a sharp rise in prices due to the conflict in Ukraine.”
Earlier in the month, Reuters reported that Chinese agriculture department officials were warning of the “worst season in history”.
A survey of Chinese farmers found a 20% reduction in harvests of higher quality winter wheat, mainly due to heavy rains during planting.
The Chinese government responded by announcing a $253 million (A$352 million) package to bolster prospects for the upcoming harvest.
Part of the money will be used to stabilize winter wheat production in five major growing regions, including Hebei and Shandong provinces, where grain plantings have been delayed due to excessive moisture, said said the Chinese Ministry of Finance in a statement posted on its website.
However, he did not specify what means would be used to boost production.
China has made headlines in agricultural circles in recent years with its ambitious plans for grain self-sufficiency under the government’s five-year plan.
However, while Chinese wheat importers may face the prospect of a surge in world prices, they have a supply opportunity not available to many other buyers.
While much of the world has sanctions in place against Russia and access to Russian grain from the Black Sea is difficult for those who would still be willing to buy Russian wheat, China recently signed an agreement authorizing imports of Russian wheat.
Trade between the two countries has been limited due to Chinese concerns about Russian wheat bunt.
This option can be something for the medium to long term, rather than short term needs.
Although Russian imports are now permitted, the supply chain is unlikely to be able to accelerate to immediately move large volumes of wheat from Russia to China.
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The story that Chinese authorities have flagged as “the worst harvest in history” first appeared on Farm Online.