In accordance with this agreement, China will liberalize its purchase of bulk agricultural commodities like wheat, corn, soybeans, rice and cotton. The wheat TRQ, for example, begins at 7.3 million tons and rises to 9.3 million tons by 2004. In all commodity TRQs, private traders will be guaranteed a share of the TRQ and a right to import using the portions of the share given to state trading companies that are not used by the state agencies. This will help establish legitimate private-sector trade in China. Taken together, the TCK resolution and the U.S.-Chinese trade agreement, represent an important new commercial opportunity for U.S. wheat producers at a critical time in the economic health of the industry.
China is the world's largest wheat producing and largest wheat consuming nation.
The U.S. is the world's largest wheat exporter. U.S. wheat exports to China have varied over the years, contingent upon Chinese wheat production levels and those of other wheat suppliers. Throughout the early 1990s, China imported from one million metric tons to 5.6 million metric tons of U.S. wheat each year. In recent marketing years, Chinese imports of U.S. wheat have declined significantly due to major increases in China's own production and the stringent enforcement of the TCK zero tolerance restriction. Nevertheless, we expect China to once again become a major importer of U.S. wheat.