China faces decline in wheat production

Domestic shipments of wheat and grain in China fell sharply after the start of the trade dispute between Beijing and Washington and the introduction of reciprocal duties, Asia Times writes.

Beijing imposed duties on imports of wheat, beans and other agricultural products from the United States in response to US duties on goods from China.

However, it seems difficult for China to fill the supply gap that has arisen since US wheat imports fell sharply. His own farms in the first seven months of 2018 produced 18.36 million tons of wheat less than in the same period last year. The total production for this period amounted to only 37 million tons, according to data from the State Administration of Grain Reserves of China.

Specifically, Henan Province in central China, a major wheat producer, delivered just 7.79 million tons.

Some farmers have reportedly moved from growing wheat to other, more profitable, crops. Combined with widespread drought this year, this trend has led to a decline in production.

The decline in production has raised market concerns over whether China can meet domestic demand for wheat, which accounts for 40% of grain consumption. It also sparked speculation at home and abroad that China might have to increase US imports again.

However, industry sources said the decline in production was due to internal factors, such as Beijing’s desire to use large-scale stocks of wheat acquired over the years.

The state reserves contain 126.8 million tons of wheat, the report says chinagrain.cn. For comparison: the annual consumption in China is about 100 million tons, according to Reuters.

The country’s state media also note that there is no need to increase purchases of American wheat in order to compensate for the reduction in domestic supplies, as the Chinese diet is gradually changing.

«The diet of consumers is becoming healthier and more balanced, which will lead to a decrease in demand» for wheat, the newspaper quoted the expert as the Global Times.

According to Vesti.Ekonomika, Chinese state media continue to criticize US President Donald Trump’s trade policies.

The official publication of China Daily said Trump’s claim about the success of duties is refuted by data that the US trade deficit in June grew by $ 3 billion to $ 46.3 billion, which was the first increase in four months.

Chinese state media are also promoting the idea that the country’s economy is strong enough to survive the “trade war.»

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