China's grain consumption is steadily increasing each year, at a rate faster than local production. China represents Canada's largest export market for Canadian milling wheat. Demand for wheat is expected to continue to grow significantly over the next decade. Grains The Chinese government controls the four staple grains under a system of quotas. With the exception of crude edible oil for refining, all other grains are exempt from this quota system.
Provinces apply and receive a quota that is a proportion of their request every year.
The most prized foreign wheat comes from Canada, Australia, the United States, and, to a lesser extent, from Argentina and the European Union. Local flour mills blend the foreign wheat with local wheat to produce higher quality and gluten content flour for domestic use and export. Although local grain consumption is rising each year, statistics show grain imports are not increasing. In recent years China has been able to produce enough grain to satisfy local consumption. Therefore, foreign grain imports are declining despite increasing grain consumption in China.