Chinese feed wheat demand to fall

07 February 20222 min reading

China’s demand for feed wheat will come down to less than half of last marketing year due to rising prices. 

China’s use of wheat in animal rations in 2021/22 is expected to be less than half of the amount of last season, analysts and traders said, as elevated prices cut demand. The volume of wheat used in feed could fall to between 10 and 24 million tonnes in the season that began in June, down from more than 40 million tonnes the previous year if current price trends persist, five traders and analysts estimated.

“Corn supplies would be sufficient in the new year while wheat prices would remain high, making wheat lose its advantage to substitute corn,” said Lv Fengyang, analyst with the agriculture arm of Mysteel, a China-based commodity consultancy. New government restrictions that prohibit wheat sold from state stockpiles to be used by feed producers will also slash demand for wheat as a feedstock, said a source at a major trader.

Less use of wheat, which has more protein than corn, means greater demand for both corn and soymeal, the main protein sources in animal feeds, according to the analysts. China consumes more than 140 million tonnes of wheat a year, and imports of wheat, which soared to a record in 2021 of 9.77 million tonnes, were still just a small portion.

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