China interested in buying more PNW soft white wheat

09.08.2013

Members of a Chinese trade team visiting Oregon and Idaho Aug. 3-8 said they're interested in buying more soft white wheat from the Pacific Northwest, a class they haven't historically imported.

China has traditionally produced almost all of its soft white wheat and imported mostly hard red spring, but the country is dramatically expanding its imports and considering other classes due to crop damage caused by persistent rains during this year's harvest of its winter wheat crop.

"They have indicated they see a huge potential moving forward of shipping more soft white out of the PNW," Idaho Wheat Commission executive director Blaine Jacobson said during an Aug. 7 trade team stop at Brigham Young University-Idaho wheat research plots.

Though Jacobson said soft white exports to China have been "practically nil," he sees great potential for the class, which can be used in noodles, sticky buns, sponge cakes, cookies and crackers.

China met 90 percent of its demand with domestic production this season, down 5 percent from normal. China has already imported 131.6 million bushels of U.S. wheat during the 2013-2014 marketing year, compared with 12.6 million bushels of U.S. wheat during the previous season.

The trade team, sponsored by U.S. Wheat Associates, included six Chinese officials representing mills in Shandong Province, China's top wheat production area.

Ming Xi Wang, a trader who runs a mill and purchases wheat on behalf of the other millers as director of Laizhou Defeng Grains Industry Co., has already received two Panamax shiploads of Northwest wheat this season. One was hard red spring wheat and the other was soft white wheat. He intends to order another soft white shipload from the region this fall.

"We definitely want to buy more," Wang said through an interpreter. "In the future, I think when I purchase U.S. wheat I will pay more attention on buying different classes of different specifications."

Wang said the trip has also given him a "face-to-face, in-depth knowledge" of the U.S. wheat industry, along with its exporting and logistics systems.

China has surpassed Japan this season as the No. 1 U.S. wheat importer. Japan just recently resumed purchases of soft white wheat from the U.S. after genetically modified wheat was discovered in a single field. No other GM wheat was found, according to the USDA. Japan's stoppage lasted two months.

Now that China has learned it can find ample wheat supplies on the world market, Jacobson anticipates the country's growers may shift wheat acres to higher-value soybeans.

"It's getting to the point where they're going to need to be importing more and more, and it makes all the sense in the world for them to come to the PNW," Jacobson said. "I think they've finally decided it was weather driven this year, but it makes more since to keep (domestic production) at 90 percent self-sufficient."

Jacobson encouraged the trade team to begin contracting for acres to ensure an adequate supply, rather than relying solely on open-market availability. The Idaho Wheat Commission intends to produce a pamphlet explaining how contracting might work on the foreign export market, emphasizing clauses ensuring the wheat meets specifications.

"They want to see it explained in more detail. They have a desire to be on the same page as domestic buyers," Jacobson said. "It's a leap of faith for them to actually commit to it as opposed to just going out and buying it."


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