Canadian wheat exports remain stable despite reduced purchases by China

In the MY 2024/25, China, the world’s largest wheat importer, has significantly cut back on purchases. According to the U.S. Department of Agriculture (USDA), China’s wheat imports are projected to reach only 3.5 million tonnes this year, down from 13.64 million tonnes last year. This drastic reduction means China, which led global wheat purchases in 2023-24, will not even rank among the top ten importers. The decline in Chinese demand is the primary reason for the USDA’s forecast of an 11.8% contraction in global wheat trade in 2024-25, marking the sharpest decline in decades.

Canada, for which China was the top wheat buyer in 2023-24, has also seen a significant drop in sales to this key market. Canadian Grain Commission (CGC) data shows that China purchased just 570,500 tonnes of Canadian wheat in the first seven months of the 2024-25 campaign, compared to 2.02 million tonnes in the same period last year. MarketsFarm analyst Bruce Burnett notes that China, the world’s largest wheat producer, likely had a strong domestic harvest last year and may be reducing its reserves, estimated by the USDA at 134.5 million tonnes at the start of 2024-25.

Despite losing a substantial portion of the Chinese market, Canada has offset this by increasing exports to other countries. Burnett highlights that Canada’s wheat exports are close to last year’s record pace, demonstrating successful market diversification. Notably, sales to the United States, Peru, and Mexico have risen. While Canada once relied on a few primary markets, its export strategy has become more flexible: in the first seven months of 2024-25, Canadian wheat was shipped to 62 countries.

China’s wheat purchases in 2025/26 remain uncertain, with much depending on its reserve management strategy and weather conditions. Currently, northern regions of China, where high-quality spring wheat is grown, are experiencing drought, which could prompt increased imports next year. Burnett suggests that the Chinese government typically waits for optimal buying opportunities to replenish reserves, which could influence future purchase volumes.

China’s reduced imports in 2024-25 also mean the country will use far less of its tariff rate quota (TRQ) of 9.636 million tonnes, which it had exceeded since 2020. This has raised concerns in the United States, which initiated a World Trade Organization dispute in 2016 over China’s TRQ administration for wheat, corn, and rice. Despite a 2019 WTO ruling and commitments under the Phase One Agreement with the U.S., a recent U.S. Trade Representative report states that China continues to fall short of its WTO obligations, creating uncertainty for traders and limiting market access for global producers.

Tags: China, Canada, wheat