Chinese buyers cancel wheat orders from Australia
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The news: Chinese wheat importers have cancelled or postponed around one million metric tonnes of Australian wheat cargoes which had been scheduled for shipment between February and April, Reuters reports, citing unnamed sources.
The numbers: China is the world’s leading buyer of wheat, importing an estimated 12 million tonnes between 2022 and 2023. Australia is China’s leading wheat supplier and shipped 6.4 million tonnes to the country between January to September 2023.
The context: The news of the cancellations comes amid a global wheat surplus, and just one week after the US reported China’s cancellation of over 500,000 metric tonnes of wheat exports. International wheat prices are trading at close to three-and-a-half year lows, after Russia began flooding the market with cheap wheat as it draws down inventories ahead of a bumper harvest.
A Singapore-based trader told Reuters that trading companies have vacated shipping slots across a number of Australian ports that had been reserved for China-bound shipments.
What they said: Andrew Whitelaw at agricultural consultants, Episode 3, commented: "Cancelling cargoes is a bearish indicator […] Whether they are doing it to buy again cheaper or because there’s less demand, it is still a bearish view on the market."
The source: Reuters
