China has a serious shortfall of strong-gluten wheat this year, sending prices soaring, according to Grain and Oils News.
China's wheat predominantly has moderate levels of gluten which are suitable for traditional products like steamed bread, but western-style breads require flour with high gluten content. After decades of cajoling farmers to produce more of this type of wheat, it is still in short supply. This year's "central document no. 1" includes a directive to focus on producing high- and low-gluten wheat.
This year the shortfall is worse than normal for two reasons. First, there were widespread quality problems with the 2016 wheat crop due to rains and cloudy weather around harvest time. The weather problems affected the main strong-gluten wheat-producing regions, Henan and Hebei Provinces, Grain and Oils News said. The overall quality of wheat from last year's harvest is low.
A second reason for this year's shortfall is greater demand for high-gluten wheat due to stricter monitoring of flour millers. Authorities are cracking down on the use of a chemical additive that flour mills had used as a dough conditioner to take the place of scarce high-gluten wheat. The additive, azodicarbonamide, has been commonly used by flour mills in China. The country's food additive standard allows azodicarbonamide to be used in flour up to .045 g/kg. Its harmfulness to health is controversial but it has gotten bad publicity around the world and in China. Demand for strong gluten wheat has surged as millers give up use of the additive.
The price of one type of high gluten wheat, Xinmai 26, is up to 1.47 yuan/500g (about $422 per metric ton), according to a mill manager in Henan Province. Yet supplies are still hard to get so the price may be bid up further.
Analysts don't expect the shortage to be alleviated until the new wheat crop is harvested in the summer. So far, conditions for the winter wheat crop are favorable and a good harvest is expected.