As of the 6th of November China included a few more Australian commodities on the banned imports list, these include, but are not limited to wine, lobsters, sugar, coal, timber and copper ore and copper concentrates. Some media reports even include wool. The advice to Chinese importers to stay away from these Australian products has led to speculation that wheat bans may be around the corner.
Unlike barley Australian wheat exports to China are minimal. China has for a fair time been self-sufficient in wheat and has an import quota system in place to appease the WTO. The majority of the WTO demand and the Chinese quota would likely come from the USA thanks to the phase one trade deal requirements. This isn’t to say that Australia doesn’t export any wheat to China.
At the moment it is believed that around 720kt of new crop wheat has been sold to China, whether or not this wheat is now shipped will be a up to the merchants involved. I’d imagine they would be looking at swapping for stocks from elsewhere as a precautionary measure.
The impact this will have on price will likely be minimal, we are more likely to lose 720kt of wheat in a weather event than to have it lost to a non-paying destination. For instance if the average test weight of wheat in NNSW was reduced from say 84kg to 76kg, that alone would account for a production decrease of around 350kt – 400kt. Take that approach across CW-NSW, the Riverina and a few regions of WA and you start to see how small a 700kt issue really is. No it’s not great to lose a market but it will not have the impact on the wheat industry that it would have on the wool industry or it initially had on the barley industry, China is simply too small of a wheat customer. As for the $2.0m worth of lobsters rotting on a Chinese port while “metal” contamination tests are completed, I feel sorry for those guys.