China continues to buy large volumes of grain, soy and maize. The country is rebuilding its pig population after the disastrous outbreak of African swine fever (ASF) and needs feed to do so. Recently, the United States Department of Agriculture (USDA) announced that China bought 4 million tons of corn in 5,85 days. China also seems to be buying in for the coming harvest.
The interest of the Chinese in (feed) raw materials does not appear to be a whim. Reuters announced today (Wednesday, February 3) that China is already buying plenty of barley from the upcoming harvest. Traders estimate that 1 million tons of barley from the new crop has already been sold in the European Union. Canadian barley is also in demand and a comparable amount has been sold.
Delivery of the barley is planned for July to September. China probably wants to bridge the period until maize from the new harvest becomes available. As China has now focused on the new crop, the demand for raw materials does not appear to be short-lived. After all, the country already has large stocks of maize and wheat. Analysts see this as a sign that China will again actively buy on the market next season.
EU the winner?
Europe is benefiting from diplomatic tensions between Australia and China. China has an 80,5% import duty on Australian barley. By importing barley from the EU and Canada, China can maintain tariffs against Australia. France shipped 1,8 million tons of barley to China this season. That is 300.000 tons more than in the entire 2019/2020 season. A pause in exports is expected due to the Chinese New Year, but analysts expect total exports to exceed 2 million tons.