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East Central Illinois | Spying on the Chinese
At the National Hard Spring Wheat Show a few weeks ago, I heard a rumor kicking around that Chinese farmers were planting record amounts of wheat this year, as much wheat as they could get in the ground. Of course, as with most things about China -- and particularly the sensitive things, like how much grain they have -- it's an idea that will go unconfirmed by any official source.
However, Interfax, a non-governmental news agency based in Moscow, prepared a report this week with some educated guesses about just how much wheat China currently has. They state, "Chinese state reserves authorities designated state-owned warehouses in the country's major wheat producing regions to purchase wheat at minimum price from farmers during the 2006 and 2007 harvesting seasons. The state purchase program, which will continue in 2008, is enriching government grain stockpiles while simultaneously supporting wheat prices to protect the interest of the farmers."
So the government is clearly engaged in the matter, as it is with soybeans. In a separate report, Interfax also detailed how the Chinese government will subsidize 2.1 million hectares (5.2 million acres) of soybean cultivation in Heilongjiang, a northeastern province. That's 300 percent what was subsidized last year.
Back to wheat, however, Interfax quoted the Securities Times (the official newspaper of the China Securities Regulatory Commission) guessing that state stockpiles are currently around 32.39 million tons. Interfax itself believes that estimate is "too optimistic." They see it more like 25 or 28 million tons and say, "While we do not believe that China's wheat security is in jeopardy, we recommend vigilance as stockpiles continue to shrink." I think that's a statement commercial wheat brokers can get behind, particularly after what we've seen happens when milling wheat gets scarce in the U.S.
China's next winter wheat harvest should come off sometime in June 2008
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Chinese Wheat Intentions-Projections Article
