China, Australia sign big new wheat deal

AWB Ltd., Australia¡¯s monopoly wheat exporter, won a contract worth about US$267 million to supply China National Cereals, Oils and Foodstuffs Corp., its biggest order from China in at least eight years.

The 1.5 million-ton contract of milling-grade wheat announced Monday adds to an order 11 months ago from China¡¯s central grain-buying agency for one million tons, Melbourne-based AWB said in a statement to the Australian Stock Exchange.

China might place additional orders to plug a local shortage of wheat suitable to make bread, dumplings and other flour-based food staples, spokesman Peter McBride said. More purchases from the world¡¯s largest wheat-consuming nation may ease a global oversupply that¡¯s contributed to a 15 percent slide in Chicago wheat futures prices this year.

"We believe China will continue to be an importer, depending on their stockpiles and production levels," McBride said. "The size of any imports is the unknown."

AWB said in the statement the shipping program for the new contract was already underway and would extend into the new year.

China¡¯s government said Monday wheat imports jumped more than 18-fold in the first 10 months of this year to six million metric tons compared with a year earlier. China chose Australian wheat over supplies from North America and Europe because of Australia¡¯s "quality and freight advantage," McBride said.

Source: Shenzhen Daily/Agencies