Market Morsel: China’s lack of gain in grain.

Market Morsel

China is clearly an important market for the world’s commodities. What happens there tends to reverberate around the world.

It has been a while since I looked at the import volumes of grains into China. In recent years, China has been on a massive buying spree. Is it holding up?

The first chart below shows the cumulative imports of wheat, barley and corn combined. In this chart, we can see that 2020 and 2021 were well above the long-term average. This year the volume of imports has been above the longer-term average but well below last year.

In earlier reports, we were concerned that China would revert back to prior levels of imports. There were expectations that China would continue to sook up large volumes indefinitely.

If we look specifically at barley, which they won’t purchase from Australia, volumes were extremely strong last year but have fallen by the wayside. They will likely be only slightly more than half of the longer-term (pre-2021) average.

China is going through some economic woes at the moment and civil disturbances. We may find that capacity in China is diminished if the economy has a reversal. As is always the case with China, it’s a bit of a mystery.