Global Grain Markets React to China’s Curtailment of Wheat Imports

Global wheat trade is expected to decline significantly in the 2024/2025 season, with the U.S. Department of Agriculture (USDA) forecasting a potential 9% drop compared to the previous season. This marks the sharpest single-year decline in decades, driven primarily by reduced imports from major wheat-importing countries like China and Pakistan, where rising domestic production is decreasing the need for foreign supplies.

China is drastically cutting wheat imports. In March, the USDA lowered its forecast for Chinese wheat imports to 6.5 mln tonnes, and by April, this was further reduced to 3.5 mln tonnes—10 mln tonnes less than the previous season’s 13.6 mln tonnes. This will significantly impact exporting countries, particularly Australia, for which China is a key market. While not explicitly mentioned, the ongoing U.S.-China trade war, with its associated high import tariffs, is adding pressure to trade dynamics.

Beyond China, other factors are constraining global wheat trade. Turkey has imposed import restrictions due to high domestic stocks, while wheat harvests in the 2024/2025 season were smaller for top exporters like Russia, the European Union, and Ukraine, leading to reduced exports. The EU’s export forecast was cut from 27 mln tonnes in March to 26.5 mln tonnes in April, a 30% drop from the previous season and the lowest since 2018/2019.

Ukraine’s wheat export forecast was revised upward by 500 thsd tonnes to 16 mln tonnes but remains well below last season’s 18.6 mln tonnes. Russia is projected to export 44 mln tonnes of wheat in the 2024/2025 season, down from over 55 mln tonnes last season. While global wheat production for 2024/2025 has been slightly downgraded, it remains at a record high, with ending stocks increased from 260.1 to 260.7 mln tonnes—still the lowest since 2015/2016.

Trade in other grains, including corn, barley, and rice, is also declining, with a projected 7% reduction in the 2024/2025 season. Global corn production is expected to decrease, particularly in the U.S., the largest exporter. Meanwhile, China, the second-largest corn importer in 2023/2024, is forecasted to cut corn imports by 65% due to increased domestic production. These shifts pose new challenges for global grain markets.

The grain market remains volatile due to a combination of trade restrictions, shifts in domestic production, and reduced harvests among key exporters. For export-dependent countries like Australia, the U.S., and Ukraine, the decline in demand from China and other importers may necessitate strategic adjustments and heightened competition in alternative markets.

Tags: Pakistan, wheat, USA, crop forecast, Ukraine, China, EU