(Yicai) Sept. 2 -- China’s market for staple grains is likely to see little short-term impact from the surge in international grain prices, as domestic supply is relatively ample and wheat and rice are largely insulated from global markets, an analyst said.

Corn, wheat, and soybean futures have surged on the Chicago Mercantile Exchange since the middle of last month, with wheat hitting a three-year high, widening the theoretical gap between the landed price in the United States and prices in China, according to the analyst at Sublime China Information, a leading information provider on commodity markets.

But China manages wheat imports through a quota system and domestic supply remains relatively ample, so prices are driven largely by supply and demand at home, rather than by global prices, the person pointed out.

China's rice production has been stable at more than 200 million tons annually for the past three years, resulting in a high self-sufficiency rate, the analyst noted. Its rice imports also mainly come from Southeast Asian countries, with relatively little from the US.

One potential area of concern is soybeans, as China imports far more than it produces. This is one of the main routes through which external prices spill over into the domestic market.

Customs data shows that from January to June, China imported 50.49 million tons of soybeans, a year-on-year increase of 2.3 percent, worth USD23.9 billion, an 8.6 percent rise. The forecast for domestic soybean production for the entire year is 20.95 million tons, while imports are expected to reach 95.5 million tons.

The analyst said that the impact of international geopolitical conflicts on the soybean market is primarily felt on the cost side. Rising crude oil prices have led to increased shipping costs for imported soybeans and lengthened transportation cycles, while high fertilizer prices have raised cultivation costs, pushing up global soybean prices.

Other analysts have pointed out that major soybean-producing regions in North America are in a critical growth period for crops. Extreme weather associated with the El Niño climate pattern poses a risk of reduced yields, and a supply contraction would drive up international soybean prices. The effect would spill over into the Chinese market next year, impacting the entire feed and livestock supply chain.

Price increases are being driven by expectations for tighter global food supplies. In July, the UN Food and Agriculture Organization forecast global wheat production for the 2026-27 season at 806 million tons, down 4.3 percent annually. Rice output may fall 1.8 percent to 552 million tons.

Meanwhile, the US Department of Agriculture projects global corn production at 1.3 billion tons in the same period, a decrease of 2.3 percent, with trade expected to shrink 4.9 percent to 210 million tons.

According to data from China’s National Bureau of Statistics, this year's summer wheat harvest yielded 140 million tons, with both yield per unit and total production increasing. Customs data shows that wheat imports in the first half of the year totaled 3.03 million tons, accounting for only about 2.2 percent of domestic production.

The Ministry of Agriculture and Rural Affairs has predicted that domestic corn output for the 2026-27 season will reach 306 million tons, and even with estimated annual imports of 6 million tons, imports would still account for less than 2 percent of total production.

Editor: Tom Litting