Is China ending its stint as major global grain importer?

Agricultural exporters around the world know this feeling all too well, as they can either flourish or flounder under China’s sometimes unpredictable demand habits.

Relative to use, Chinese corn and wheat stocks in 2024-25 are both set to reach the lowest levels in about a decade, though this is not translating into the opportunity one might expect for global grain suppliers.

The U.S. Department of Agriculture on Tuesday slashed Chinese grain imports for 2024-25, certainly not surprising given China’s recently lighter market involvement.

The agency now pegs China’s 2024-25 corn and wheat imports at 10 million and 8 million metric tons, respectively, down nearly a quarter from the January estimates. These volumes would be down 57% and 32% from the respective averages of the previous four seasons.

China’s predicted grain hauls will still be historically large, though some global grain exporters may need to block out the memories of what used to be and focus on a newer normal.

BEFORE AND AFTER

Throughout the 2010s, China imported modest amounts of corn and wheat, averaging just over 3 million tons of each per year. That accounted for about 2% of annual world imports – volumes that were practically drops in the bucket compared with China’s overall grain usage.

China was also heavily stockpiling grain during that time in the name of food security, rapidly increasing the share of world grain supplies sitting in the Asian country.

But China abruptly ramped up grain imports in 2020. Its corn haul for the 2020-21 marketing year totaled 29.5 million tons, more than five times the pre-2020 maximum. Much of that was U.S.-sourced, and China easily became top corn importer.

USDA balance sheets at that time suggested Chinese corn supplies were ample and that import needs should not be dire. Domestic corn and wheat crops were near record highs.

However, there were credible rumors that Chinese corn stocks had rapidly dwindled by mid-2020, much of it potentially spoiling in storage.

China’s corn futures offered clues, having risen slightly earlier and more rapidly than global prices in mid-2020 and presumably reflecting domestic supply concerns.

Chinese demand helped U.S. corn exports hit exceptional levels in 2020-21 and 2021-22 despite relatively thin U.S. supplies, but Brazil siphoned much of that business starting in 2023 with China finally green-lighting Brazilian corn.

U.S. corn exports to China in 2022-23 fell nearly 50% from the previous year, and 2023-24 shipments fell another 60%. Brazil started feeling China’s pullback last year as 6% of its calendar-year 2024 corn exports went to China, down from a whopping 29% in 2023.

The shift in Chinese wheat imports is less extreme but still notable. Its 2023-24 haul reached a 32-year high of 13.6 million tons. Australia is a top wheat supplier to China, though the United States shipped 1.9 million tons to China in calendar 2024.

China was the world’s leading wheat importer in 2022-23 and 2023-24, but it is set for the fourth spot in 2024-25.

CHINA’S FUTURE

China’s corn and wheat harvests were both record-large in 2024-25. As such, stocks-to-use is set for levels that any other country would consider tremendously burdensome, some 65% for corn and 86% for wheat.

However, those are 11- and nine-year lows, respectively, which could eventually favor China’s return to global grain trade. By comparison, some analysts cannot agree whether U.S. corn stocks-to-use at 10% is bullish.

But China’s economic growth is seen slowing this year and again next year, which typically does not bode well for agricultural purchases in general.

China last week delayed imports of up to 600,000 tons of mostly Australian wheat, emphasizing its retreat as an importer. It also has a negligible amount of U.S. corn on the books for export in 2024-25, the volume being the lowest for this time of year in eight years.

Chinese corn futures have drifted about 13% higher from recent lows set two months ago. Chicago corn futures have risen by the same degree since then, indicating some level of synchrony between the two markets.

But global grain exporters, particularly the United States and Brazil, may need to channel the pre-2020 mentality for now, ensuring that trade with their mainstay customers remains strong.