Chinese grain imports suffer from war in Ukraine

The Russian-Ukrainian conflict will put pressure on China, which is especially dependent on Ukrainian imports, especially feed grains. The Empire of the Rising Sun is preparing to refocus its purchases and increase production.

In the 2020/21 marketing year, Ukraine exported 12.3 million tons of grain and 1.26 million tons of oil to China. (©AdobeStock) AGAINSTIn the world’s leading wheat producer, “production has not kept pace with consumption for two seasons,” explains Li Zhao Yu, head of Intercereals’ Beijing office, who also recalls that China ” 100 million tons of strategic reserves “.

The average empire actually produced 134.3 million tons of wheat in 2020/21 for the year. consumption 146 million tons, according to the International Grains Council (IGC). For 2021/22, the organization estimates Chinese production at 137.1 million tonnes and consumption at 142 million tonnes.

Stocks, imports, production and consumption of wheat in ChinaStocks, imports, production and consumption of wheat in China since 2012/13 (© CIC)

China produces 80 to 85% of the cereals consumed.

The same observation applies to rice and corn. Corn consumption exceeds production according to CIC since 2017/18 campaign The difference especially widened in 2020/21, when production is estimated at 260.7 Mt and consumption at 287.9 ​​Mt.

Stocks, imports, production and consumption of corn in China since 2012/13Stocks, imports, production and consumption of corn in China since 2012/13 (©CIC) This development is explained, in particular, by the increase in meat consumption per year and per capita and, consequently,breeding boomwhich affects China’s demand for cereals, especially forage.

“In 2013, meat consumption reached 63 kg / year per person, that is, the need for cereals throughout the country is 210 million tons,” the expert believes. In 2021, consumption increased to 70-71 kg/year/inhabitantwhich corresponds to the need for 352 million tons of grain.”

Thus, China currently produces only 80–85% of the cereals it consumes, making it more dependent on imports than a few years ago.

Ukraine puts a lot of pressure on cereals imported to China

Grain imports jumped to 62 million tons in the 2020/21 season from 25.6 million tons in the previous season. In 2021/22, CIC expects 49.2 million tons to be imported in mid-March.

And Ukraine usually major supplier in China : leading supplier of sunflower oil, 2 and corn and 3 and barley, last season shipped 12.3 million tons of cereals and 1.26 million tons of oil. This amounts to practically “5.3 million hectares, or 4.4% of Chinese arable land “.

China “imported 6.8 million tons of barley of all qualities between July and December 2021, including 2.6 million tons from Ukraine,” explains Li Zhao Yu. The country was waiting another 150,000 tons of Ukrainian barley by June 2022.

For corn, Chinese imports reached 13Mt in the first half of 2021/22, including 11Mt from the US and 1.9Mt from Ukraine, which were due to ship another 6 million tons in the second semester.

China turns to other sources and encourages production

But the war shuffles the cards and raises a “big question mark” about imports. Several boats loaded with corn would have left Ukraine for China, “with customs clearance efforts” but without at the moment there is no certainty about the quantities.

And in the future, “who will replace Ukraine in business innings ? the expert asks. China may well redirect its supplies to Russian originwhich further strengthened the rapprochement that had taken place over several months between the two countries in the field of agricultural trade.

Another potential supplier to fill the shortage of Ukrainian grain: United States. China just bought 1.084 million tons of corn from them, the US government announced on April 4. This is the largest contract between the two countries since May 2021 for grain.

The Chinese state, for its part, has implemented stimulus policies to stimulate its productive capacity. The government is rapidly targetingself-sufficiency in cereals for human consumption (wheat and rice) and intends to achieve 80% self-sufficiency in all cereals in the long term.

Despite these ambitions, “China will remain still imports cerealsforage in particular,” predicts Li Zhao Yu. The main reason for this dependence on the international market in the coming years? ” growing urbanization and rising living standards are increasingly limiting arable land and fresh water in China,” he warns.

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