The USDA’s latest estimates show China as the world’s largest producer, importer, and holder of wheat inventories.
Everyone knows China is the most populous country on the planet. But most people don’t realize that China is also the largest producer of wheat in the world behind India. Both countries have enormous populations that have to be fed, and wheat is a primary food staple, so it makes sense that China and India are the world’s number one and number two wheat growing countries.
But the most recent USDA World Agricultural Supply and Demand Estimates (WASDE) released this week show China as the dominant wheat player in virtually every metric except exports. India is fortunate enough to be able to grow all the wheat it needs; in most years India even produces a slight surplus it makes available for export to neighboring countries. China can’t export meaningful amounts of wheat because it isn’t able to grow enough wheat to fulfill its own domestic demand. (For anyone wondering, Russia is the world’s top wheat exporter.)
Notably in this month’s WASDE report, USDA officials explicitly stated that “China is now the leading 2022/23 global wheat importer.” China has now outpaced Egypt for the title of world’s top wheat importer, which marks a major milestone in the world of global wheat trading. Egypt has been growing and importing wheat throughout its long history, and it has long held the top spot as the world’s number one wheat importing country, but no longer.
Equally, if not more significant to those watching closely, this year China is expected to hold more than half of all surplus wheat in the world, with a fifty-two percent share of what the USDA classifies as “Ending Stocks.” Ending Stocks for grains represent the amount of grain that is left over after taking into account total global inventories, production, and use in a given crop year.
What does all of this mean? Probably not much other than to say that China’s wheat demand continues to grow, in no small part due to the Westernization of Chinese dietary habits, but mostly because of a basic lack of arable land and adequate water resources needed to grow the increasing amount of wheat the Chinese people demand.
Make no mistake, right now there is plenty of wheat in the world; enough for every country to satisfy its own unique demand needs. But the ability of China – or any other importing country for that matter – to secure enough wheat for its people will always be dependent upon proper management of supply and demand through government policy. This means agricultural policy, free markets, and the unimpeded flow of goods in international import/export logistics chain should always be a top priority for political leaders.
China’s increasing levels of wheat imports and excess inventories make clear that its leadership is keenly aware of the importance of food supply and availability. The country does not hesitate to do whatever it deems necessary to assure the health and well being of their populace, at least in terms of the need for wheat.
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