Chinese buyers cancel or postpone Australian wheat buys amid global oversupply

Chinese wheat importers have cancelled or postponed about one million metric tons of Australian wheat imports, trade sources with direct knowledge of the deals said, as growing world stockpiles drag down prices. The moves come after the US government reported cancellation of more than 500,000 metric tons of US wheat exports last week to China, the world’s No. 1 buyer, with international prices trading close to three and a half year lows.

“Chinese buyers have cancelled some deals for Australian wheat, and they are also moving the shipping time from the first quarter to the second quarter, third quarter,” said one Singapore-based trader at an international trading company, which sells Australian wheat to Asia.

Sources said the steep decline in prices is the most likely reason for China’s cancellation of Australian and US cargoes, with some citing oversupply in the country’s domestic market following large imports. A second trader in Singapore said trading companies have vacated shipping slots across several Australian ports, which were booked for cargoes to be shipped to China.

Wheat procurement target of 900,000 tons at the rate of Rs4,000/40kgs approved Both traders declined to be named because of the sensitivity of the matter. Benchmark Chicago wheat futures have dropped more than 14% in 2024 to their lowest since August 2020, thanks to the ample world supplies. The market was trading down 1.5% at 0708 GMT on Thursday. Russia, the No. 1 exporter, is flooding the global market with cheap wheat as it draws down inventories ahead of an expected bumper harvest.

Refinitiv data shows benchmark Russian wheat export prices slipped below $200 a metric ton ($5.44 per bushel) this week for the first time since August 2020, marking the lowest early March price since 2017.