A large portion of Canada‘s 2021 barley harvest has been booked by Chinese buyers, with one trader saying at least 1 million tons, several international traders said. Meanwhile, the new European barley crop has sold at least 1 million tons, some of which came from France, with one trader even estimating French sales as high as 2 million tons.
Some traders said that these barley shipments will be mainly in July to September this year. China’s big import of barley is intended to fill the gap in domestic feed.
Brent Atthill, head of consulting firm RMI Analytics, said, “This confirms the view that Chinese demand is not short-term.”
China’s large imports of barley have pushed up its prices, with some traders saying that exporters have pre-sold a large amount of barley to China since the end of 2020, thus backfilling some cargoes. This has caused feed barley prices to be much higher than wheat for bread in rare cases.
Higher corn prices have been passed on to the downstream feed industry, leading to a 20% increase in feed costs.
In the face of rising corn prices, some Chinese farms have turned their attention to wheat, using it as a substitute for corn. Since January this year, the price of wheat has also started to rise.
And China is now in addition to barley, while also continuing to increase the number of purchases of U.S. corn. U.S. Customs data show that China imported 11.3 million tons of corn last year, exceeding the WTO quota for the first Time. U.S. Department of Agriculture data show that China purchased close to 6 million tons of U.S. corn in the last week of January, a record high for a single week.
For China’s big purchase of overseas corn and barley to fill the domestic feed gap, commentator Wen Xiaogang believes that, for one thing, it shows that China’s grain silos are not as plentiful as Chinese authorities believe, and there have been reports over the past few years of Chinese grain warehouse custodians monitoring and stealing, exchanging old grain for new grain to be sold on the market, and whenever someone from above comes down to inspect, there are almost always incidents of grain silos being burned, which outsiders have been questioning as a way to This has been questioned as an attempt to destroy evidence.
In addition, China’s massive purchase of barley may prove that last year’s floods in the Yangtze River basin caused China’s grain production to drop, and the amount was not small. Although China refuses to acknowledge the reduction in grain production caused by the floods, some farmers in the affected areas said in an interview with the official media at the time that the summer grain harvest was definitely over, and there was no way to plant the autumn grain because the floods in the fields were late, so they had to go out to work in the second half of the year.
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