UPDATE 1-China 2013/14 wheat imports seen at decade-high after crop damage-CNGOIC

Thu Jul 11, 2013 1:52am EDT

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(Gives further estimates for wheat harvest, consumption; adds
impact on prices)
    BEIJING, July 11 (Reuters) - China, the world's top wheat
grower, is expected to import the highest volume of the grain in
a decade in 2013/2014 after its domestic harvest was damaged by
bad weather, according to a forecast by an official think tank.
    China's wheat imports in the year beginning June is forecast
at 5 million tonnes, up 73 percent from 2.89 million tonnes the
previous year, according to the forecast by China National Grain
and Oils Information Centre (CNGOIC).
    China bought more than 1.3 million tonnes of U.S. wheat in
early July in a flurry of deals after U.S. prices fell to near
the lowest levels in a year. The damage to China's harvest has
kept local prices strong, spurring the call on imports.
 
    China's import buying has supported U.S. wheat futures
, which rose for a fourth consecutive session on Thursday 
to trade around the highest in two weeks.    
    
    China's state grain stockpiler China Grain Reserves
Corporation (Sinograin) has stopped buying wheat from the
country's top wheat region of Henan to cool local prices that
spiked after rains damaged crops. Domestic wheat is
trading at it highest in six months. 
    Rains in late May damaged domestic wheat quality in Henan,
where about 10 million tonnes had to be downgraded to feed-use
purpose, analysts estimated. 
    CNGOIC revised upward the forecast for 2013/14 from an
earlier estimate of 3.5 million tonnes of wheat imports for the
year, although the think tank maintained this year's domestic
harvest estimate unchanged from its last month's forecast. 
    China is expected to produce 120.6 million tonnes of wheat
in 2013, almost flat from last year, CNGOIC said. Consumption is
likely to fall by 1.4 percent from last year largely due to the
reduction of wheat use as a substitute for corn.
    Chinese feed mills used 21 million tonnes of cheap wheat to
substitute for expensive corn last year. This year, the volume
for corn substitution is seen falling to 17.5 million tonnes,
according to CNGOIC.  
    The centre gives the following forecast (in million tonnes):
    
    Wheat                2013/14                  2012/13       
      
    Output               120.63                    120.58
     Of which
    Winter wheat         115.3                     114.8
    
    Import                 5.0                       2.89
    
    Total consumption:   123.5                     125.3 
     of which:
     milling              89.0                      87.60
     feed use             17.5                      21.0
      

 (Reporting by Niu Shuping and Jonathan Standing; Editing by Tom
Hogue)
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