China Procuring Massive Quantity of Feed Grain From France and Ukraine

By Ashok Ramprasad | December 13, 2021
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China is buying up huge volumes of feed grain.
China is buying up huge volumes of feed grain. (Image: ThiloBecker via Pixabay)

China is the world’s top consumer of meat and grain. The country’s import of grains is swiftly rising. A major reason for this growth is the increase in demand for livestock feed resulting from excessive consumption of meat. 

China is not producing enough feed grains to support its large and growing livestock industry. As the demand for meat, eggs, and dairy products increases, the need for animal feed rises accordingly. The country has been forced to rely on imports to meet the changes in the consumption patterns of its populace.

Trade sources recently revealed to Reuters that Chinese buyers have snapped up Ukrainian corn and barley as well as French wheat and barley in large volumes. The Chinese intend to benefit from a break in the surging prices to meet their requirements for feed grains.

While there was no clear picture of the overall quantity purchased, the sources said that at least several hundred thousand tons of grain from France and Ukraine had been acquired by the importers. Some sources also revealed that Chinese buyers made substantial purchases of Australian feed wheat estimated to be at least several hundred thousand tons.

The purchases highlight that China’s necessity for grain import is substantial and ongoing in spite of the advent of its domestic corn crop and problems in its pig industry. Moreover, it depicts buyers’ eagerness to make the most of the decrease in global prices.

Driven by worries of heavy rainfall damaging Australian crops and limitations on Russian exports, wheat futures jumped to a nine-year high in the United States and a record high in Europe last month. Since last week, prices have fallen notably. 

With regard to French wheat, six traders said that the buyers had lined up between six and 10 vessels, or probably up to 600,000 tons, mostly for shipment between January and March. The sales which have happened lately would bring the aggregate exports of French wheat to China in 2021/22 to a whopping two million tons, exceeding the already huge numbers in the two prior seasons.

“French wheat is currently looking attractive in price to the Chinese after falling from its peaks… China is also believed to have been making large purchases of wheat from Australia recently with China’s economic recovery generating demand,” a trader from Europe told Reuters.

Sources revealed that Chinese importers were also entering into contracts to purchase harvest barley from Ukraine and France for 2022. Up to 10 consignments of Ukrainian barley and about four French barley ships have been reserved for shipment for July-August next year.  

For shipment from January to April, Chinese buyers have also requested cargos from Ukraine for corn. Some project the volume to be 10 or more cargos. A source is seeing overall volumes hitting up to a million tons. China is one of the chief importers of Ukrainian corn and barley. Ukraine is expected to ship up to 5 million tons of corn to China.