Chinese wheat importers have reportedly cancelled or delayed approximately one million metric tons of Australian wheat shipments, reflecting a broader trend of adjustments in response to a surplus in global wheat supplies. This development follows the recent cancellation of over 500,000 metric tons of U.S. wheat exports to China, amidst international wheat prices hovering near three-and-a-half-year lows.
China, a significant wheat importer, ramped up purchases last year following crop damage caused by adverse weather conditions. The country primarily sourced wheat from Australia, the U.S., France, and Canada. However, the influx of cheap wheat from Russia, the leading global exporter, has led to a decline in prices as Russia aims to reduce its inventories ahead of an anticipated robust harvest.
Traders anticipate that China may reconsider purchasing wheat to capitalize on the lower prices prevailing in the market. Chinese buyers have reportedly cancelled existing deals for Australian wheat and rescheduled shipping timelines from the first quarter to subsequent quarters, according to industry sources.
Amidst these adjustments, trading companies have relinquished shipping slots at various Australian ports that were initially designated for wheat shipments destined for China. The decline in benchmark Chicago wheat futures, down over 14% in 2024 to their lowest levels since August 2020, reflects the impact of abundant global wheat supplies on market dynamics.
As international wheat prices continue to face downward pressure due to surplus stocks, market participants are closely monitoring developments in global wheat trade patterns and adjusting their strategies accordingly to navigate the evolving landscape of the wheat market.