This is the first shipment of Russian wheat to China since 1976, when China banned import of the product due to its inadequate quality. The negotiations to re-open the Chinese market for the Russian grain have been active since 2006, when eventually, on 17 December 2015 the two countries signed a protocol on quarantine inspection requirements for exporting wheat, corn, rice and soybean from the eastern regions of Russia to China. Since that, Russia has resumed deliveries of corn and soybean to China, however the first lot of 500 tonnes of wheat from Krasnoyarsk region has been shipped only now.
China’s state-owned foodstuff conglomerate COFCO Corp. is responsible for quality control, import and distribution to the Chinese market.
COFCO president Yu Xubo said the group plans to import 1 to 2 mln tonnes of wheat from Russia annually, which may reach up to 5 mln tonnes in the future.
Last year Russia replaced the United States as the world’s top wheat exporter with 25 mln tonnes of exports, as per the figures of Russian statistics.
According to China’s customs statistics, wheat imports into the country increased in January-February, 2017 by 63.3% y-o-y, up to 567.32 th. tonnes. The leading wheat exporter to China is Australia: 389.66 th. tonnes (up 2.3 times), with average price of USD 210/t. Canada shipments dropped by 41.2%, down to 71.44 th. tonnes, average price is USD 265/t. The United States’ wheat exports are not so voluminous (67.94 th. tonnes), but in the first two months of 2017 they grew 26 times. The average price of the US wheat is USD 208/t. Kazakhstan is another wheat trading partner of China: 38.28 th. tonnes, by average price of USD 213/t.