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Asian grains: flour millers buy Black Sea wheat, Thailand buys US cargo

Asian flour millers bought 112,000 tonnes of Black Sea wheat in recent deals for shipment in July and August as suppliers from Russia and Ukraine aggressively market their upcoming crop. Sales of Black Sea wheat in Asia come at the expense of Australian cargoes, which are too expensive to compete in the global market, traders said.

Malaysian millers paid $210 a tonne, including cost and freight (C&F), for 12,000 tonne of Russian wheat with 12.5 percent protein level. Indonesia and the Philippines took 50,000 tonnes each for August shipment, paying between $210 and $215. “Black Sea wheat is the cheapest wheat available in the market,” said one Singapore-based trader. “Australian wheat is too expensive to compete.”

Australian prime wheat with 10.5 percent protein, which is similar to Russian 12.5 percent bought by Malaysia, is quoted at $260 a tonne, C&F. But importers such as Japan, Taiwan and Thailand are sticking to their preferred origins, shrugging off cheaper Black Sea wheat. A Thai mill bought 45,000 tonnes of US spring and white wheat this week for arrival in September. It paid around $300 a tonne, C&F, for spring wheat and $260-$270 a tonne for white wheat, traders said.

Millers is southern India prefer Australian wheat and they have booked about 250,000 to 300,000 to be shipped between May and July. “Indians like Australian wheat because it is similar to what is produced in central and western parts of the country, so it is easy to blend,” a second Singapore-based trader said. “Black Sea wheat is red in colour.” The first shipment carrying some 30,000 tonnes of Australian wheat is due to arrive at India’s Tuticorin port on Monday. India is not a regular importer of wheat but this year mills in southern India bought grains after unseasonal rains damaged crop quality ahead of harvest in April. “We are getting more enquiries from India but I think they will wait and see government’s reaction after the arrival of first few shipments,” the second trader said.
Source: Reuters