WASHINGTON (B)--China's purchase this week of 50,000 tonnes of US wheat could be the first of many such sales if "China can be satisfied" by US inspection regime and if the US can meet "China's demand," according to the president of COFCO, China's official state trading firm.
Speaking through an interpreter, Zhou Ming Chen told reporters Feb. 29 that he believed that the US grain inspection will work, and while it will be difficult to implement the bilateral agreement between Beijing and Washington, China is cooperating with US traders and wheat producers.
"I have deep confidence that the transaction can work out smoothly," Zhou said.
Monday, China agreed to buy 50,000 tonnes of US wheat
for delivery in May from United Harvest in Portland, Ore. Zhou referred to the 50,000 sale--30,000 tonnes of soft white wheat, 10,000 of hard red winter and 10,000 of hard red spring--as a "trial cargo."
China has not purchased US white wheat for 20 years over concerned about contamination by the TCK smut fungus. However, in April 1999, China agreed to accept USDA inspection standards for TCK smut. According to USDA General Sales Manager Richard Fritz, the US must ensure that the wheat shipment contains no more than 30,000 TCK smut spores for every 50-gram sample.
Fritz said the wheat purchased was part of a confidence-building measure to ensure the Chinese that the US wheat inspection system works, a sentiment echoed by Zhou.
"We are building a boulevard that is smooth and wide," Zhou said.
USDA recently estimated that China's demand for imported wheat could reach 3 million tonnes, due in large part to lowered government procurement prices and a reorientation of domestic agricultural priorities away from grains and cotton.
"What they really need are high-quality wheat for blending," USDA Agricultural Attache Suzanne Hale said.
Fritz said no one would really know what the effect of changes in China's domestic farm policies will be until after they've been made.