Buyers might be considering a major purchase, a report indicates
By Diego Flammini
A large U.S. ag customer may want to make a significant wheat purchase.
Chinese buyers are considering buying between three and seven million tons of American wheat, Bloomberg reported. The U.S. exported about 900,000 tons of wheat to China in 2016.
China included U.S. wheat in its 25-percent tariff package on certain American ag products in March 2018. American wheat shipments to China have almost completely stopped as a result.
The volume of China’s wheat purchase could depend on how trade negotiations between the two countries progress. The Chinese may buy a small amount and increase interest if talks go well, a person familiar with the situation told Bloomberg.
But members of the U.S. wheat industry are reserving judgement until they see tangible results.
“Right now, this is all rumour and speculation and we don’t put much stock in that at all,” Steve Mercer, vice-president of communications for the U.S. Wheat Associates, told Farms.com. “When there are boats in the water loaded with U.S. wheat headed for China, then we can talk about how U.S. growers are going to benefit from it.”
Despite the current uncertainty, a trading relationship with China is important for the future of U.S. ag, Mercer said.
Chinese buyers “need high-quality wheat and we can supply it,” he said. “That’s what they were buying before this trade war started. I think we all know how much better the industry is when we have good trading relationships, so let’s hope this gets resolved sooner than later.”
Farms.com has reached out to commodity analysts for comment on how a large Chinese wheat purchase could affect market prices.