China commits to buy wheat
Published 4:18 pm Sunday, February 29, 2004
SPOKANE – A Chinese commitment to buy 300,000 metric tons of old and new crop soft white wheat appears to confirm the end of that country’s 34-year embargo against Northwest grain supplies.
Soft white wheat is the predominant wheat grown in the Northwest, including Umatilla and Morrow counties.
Parties involved in discussions with the Chinese believe the latest commitment to buy large quantities of the disputed wheat class are genuine this time. In 2000, a Chinese wheat team visiting the United States also said they would purchase soft white wheat, but since then have only tendered for token amounts.
Northwest wheat was first embargoed by China in 1972 as a result of TCK smut, a spore-borne disease that is prevalent in the region. A Pest Risk Analysis conducted by the Animal Plant Health Inspection Service of the U.S. Department of Agriculture appeared to put the issue to rest in 1999, and the Chinese agreed to take soft white shipments that met certain spore thresholds.
But the numbers speak for themselves. In 2001/02 the Chinese took 34,000 tons of soft white. In 2002/03, they purchased 31,000 tons. And some in the trade question whether those cargoes actually made it to China or were diverted to other destinations,
The latest announcement, however, seems to signal that Chinese squeamishness over soft white is over. First, the team announced China will lift 1.275 million metric tons of wheat through Northwest ports. Besides the soft white, that includes 835,000 tons of hard red spring wheat.
That in itself is worthy of note, given the fact the Chinese once considered the Northwest grain handling infrastructure contaminated with TCK spores.
Dawn Forsythe, spokesman for U.S. Wheat Associates, said these purchases speak to the Chinese commitment on TCK. Although a $30-a-ton lower freight rate over the Gulf of Mexico is probably a big factor in the Chinese decision to take soft white, they still wouldn’t buy it if TCK was an issue.
“Chairman Zhou stated that the TCK issue was resolved, and their purchases give every indication the issue is resolved,” Forsythe said.
Tom Mick, chief executive officer of the Washington Wheat Commission, also is optimistic.
“They made it clear TCK is no longer a problem,” he said. “They seem very sincere this time.”
Besides the freight differential, Mick said the advantages of soft white over its chief competitor, soft red, include a higher extraction rate and lower moisture content.