The US Department of Agriculture is seeing a boom in Chinese imports of rice and other grains, which are driving up the price of U.S. grain and grain-based food.
In the last three years, the value of Chinese imports has more than doubled from $20 billion to $28 billion, according to the USDA’s Grain Board.
The rise in Chinese food imports comes amid a sharp rise in corn and soybean prices, which have risen from $7 a bushel in the early 1990s to more than $10 a bushell in the last two years.
The U.N. Food and Agriculture Organization said last week that China is the world’s largest exporter of corn, and it expects China to increase its corn exports by 60% in the coming years to reach a record of nearly $70 billion this year.
U.K. food prices rose in May and are expected to increase again in June.
But that doesn’t seem to have stopped the Chinese from buying more U.k. products, said Brian MacLeod, a commodities economist with the consultancy Citi Research.
In May, U.s. corn prices were up 9% from a year earlier, but that price is set to climb to $1.26 a bushe in July, according the USDA.
That’s up from $1 a busha in April, when U.a. maize was up 5%.
China’s demand for grain is also driving up food prices.
In April, China was the world leading importer of U,s.
wheat, up by nearly $20 per bushel to $40 billion, the USDA said.
The Chinese are also buying U.l. grain, the grain from which U.ks. wheat and rice are made.
Ummul Islam, a food analyst at the Agricultural Research Service in Washington, said that the U.kg.
(U.S.) wheat futures have risen a full 10% this year, compared with a 6% gain in the past year.
The increase in Chinese grain imports has boosted the price on the futures market, which in turn has made grain prices cheaper in the United States.
And that has sent U. l grains into freefall, as corn futures are now trading below $5 a bushet.
That means U. a. wheat prices are now more than 10% below what they were in May, MacLeod said.
“That has made it harder for the grain exporters,” he said.
Uumul Islam says the grain price decline is more of a challenge to the grain importers than the price rises in corn or soybeans.
“We expect the price rise in wheat to accelerate and, with it, the demand for wheat,” he says.
But Uumuls wheat price decline has been short-lived.
China’s rice demand is growing, as is its soybean demand.
“The demand for soybeans is going to pick up and it’s a good thing,” MacLeod says.