The People's Republic of China: Determinants of Wheat Import Demand

China is one of the world's largest wheat producers and, at the same time, is a major importer, averaging 13 million tons over the last 5 years. In 1992, the state had great influence in the production, consumption, stock management, and domestic marketing of wheat. CEROILS, a state trading corporation, manages wheat imports. The U.S. share of China's wheat imports fell from 56 percent in 1989 to 32 percent in 1992. CEROILS claims wheat quality is an important element in purchase decisions but from its purchasing behavior, price is the most important consideration. CEROILS said it will not offer a premium for cleaner U.S. wheat but would buy more U.S. wheat if offered at the same price. Our conclusion is that the trade impact of cleaner wheat likely would be a 1-5 percent expansion of U.S. exports to China