China Buys 400,000–500,000 Tons of Wheat from Australia and Canada Amid Domestic Heat Threats
Chinese buyers have purchased 400,000 to 500,000 metric tons of milling wheat from Australia and Canada due to concerns over domestic crop damage from hot, dry weather in Henan province. This marks China's return to the Australian wheat market after a year-long hiatus. The wheat is for delivery in July and August, driven by weather-related urgency and low global prices. China also bought around 200,000 tons of Canadian wheat. The purchases exclude U.S. wheat due to trade tensions. Additionally, China has secured significant volumes of barley from France or Ukraine.
China Returns to Australian Wheat Market After a Year-Long Hiatus
According to traders at two major Australian grain firms, Chinese importers booked four or five panamax shipments—each carrying approximately 55,000 tons—of Australian milling wheat for delivery in the coming months. These bookings are the first from Australia since 2024, when China significantly reduced imports following a bumper domestic harvest.
In addition to the Australian deals, China also secured around 200,000 tons of Canadian wheat. While details of the Canadian transactions remain limited, the sales have been widely discussed in Winnipeg, Canada’s grain trading hub. The wheat purchased from both countries is of milling quality, suitable for food production rather than animal feed.
Domestic Weather Risks Prompt Urgent Buying
The renewed buying activity comes as China faces mounting threats to its 2025 wheat harvest. Earlier this week, Henan province issued a risk warning due to prolonged hot and dry conditions. The province is a critical part of China’s grain belt, and any disruption there could significantly impact national output.
One trading source noted that their firm had revised down its forecast for China’s 2025 wheat production by approximately 5 million tons. While China maintains large wheat inventories and is generally self-sufficient in feed grains, the potential for a shortfall in milling wheat appears to have triggered the recent import activity.
A Shift from 2024’s Import Slowdown
China imported around 11 million tons of wheat in 2024, valued at approximately $3.5 billion, making it one of the world’s largest wheat importers. However, imports slowed sharply in the latter half of the year after China harvested large volumes of wheat and corn. Between September 2024 and March 2025, China imported less than 1 million tons of wheat, according to customs data accessed via Trade Data Monitor.
The slowdown in Chinese demand contributed to a global glut, pushing benchmark wheat futures in Chicago to a four-year low in July 2024. Prices have remained subdued since, creating favorable conditions for opportunistic buying.
Strategic Sourcing: Avoiding U.S. Wheat
Notably absent from China’s recent purchases is U.S. wheat. Traders cited ongoing tariffs and trade tensions between Washington and Beijing as key deterrents. Although the U.S. was once a major supplier to China, the trade war has redirected Chinese demand toward other exporters, particularly Australia and Canada.
“Chinese buyers would have avoided buying U.S. wheat due to tariffs and the trade war,” one trader explained. This strategic sourcing decision underscores the geopolitical dimensions of agricultural trade, even as China prioritizes food security.
Barley Purchases Signal Broader Import Strategy
In addition to wheat, Chinese importers have also booked significant volumes of barley. Traders reported that six panamax vessels—each carrying about 60,000 tons—of French or Ukrainian new-crop barley were sold for delivery in July or August. Some estimates suggest total barley purchases could reach as high as 1 million tons.
The barley deals were reportedly done at prices ranging from $250 to $254 per ton, delivered to China. These purchases, like the wheat deals, are among the first major grain imports China has made in many months, signaling a broader shift in procurement strategy as the 2025/26 crop year approaches.
Market Implications and Outlook
While the recent purchases are substantial, analysts caution that they may not signal a sustained increase in Chinese imports. Rod Baker, an analyst at Australian Crop Forecasters, noted that China remains well-stocked in feed grains and that economic headwinds are dampening overall grain demand.
“China is well self-sufficient in feed grains this crop year with heavy stocks,” Baker said. “Faltering economic growth in China is also depressing demand for grains.”
Nonetheless, the combination of weather risks, low global prices, and strategic sourcing considerations has prompted China to re-enter international grain markets. Whether this marks the beginning of a broader trend or a short-term response to domestic weather threats remains to be seen.
