China cancels purchase of 1 million tons of Australian wheat

According to market operators, Chinese buyers are refusing to purchase 1 million tons of Australian wheat, which was to be shipped in February, March and April of this year, Reuters reports.

Thus, according to traders, some agreements for the supply of Australian wheat have been completely canceled, and delivery dates for others have been postponed to the second and third quarters of this year. In some cases, buyers who reject or delay purchases must pay fines.

It is explained that the decline in world wheat prices to the lowest level in the last 3.5 years is prompting China to cancel deliveries after large purchases at the end of last year and in early 2024. The basic wheat futures on the WORLD exchange decreased by more than 14% in 2024, reaching the lowest level since August 2020 due to the availability of sufficient global stocks.

Another factor contributing to the decline in global wheat prices is the fact that Russia is actively offering cheap grain on the world market, reducing its stocks ahead of the expected high harvest. Export prices for Russian wheat fell below $200 per tonne for the first time since August 2020, becoming the lowest in early March since 2017.

Last week, the USDA announced the cancellation of exports of more than 500 thousand tons of US wheat.

Tags: Australia, China, wheat