Pakistan sold some 50,000 tonnes of wheat to Southeast Asia this week on competitive offers, while India's corn sales to Indonesia took a hit after exporters raised offer prices. Wheat cargoes from Pakistan were quoted around $310-$315 a tonne, including cost an freight (C&F), compared with $420-$425 a tonne being offered for prime wheat and $325 a tonne for feed wheat, both from Australia.
Traders expect more deals of Pakistani wheat in the weeks ahead as there were enquiries from Malaysia and Indonesia. "Pakistan has good prospects for exports as not only the prices are competitive, they are offering grains with 12 percent protein content," said one trader with an international trading company in Singapore.
"They are even cheaper than Australia feed wheat." Asian wheat importers have remained on the sidelines in the last few weeks, buying only hand-to-mouth as global prices continue to climb. The benchmark Chicago Board of Trade wheat futures added more than 7 percent this week, taking the gains to 22 percent from March lows.
Asia's third-largest wheat producer, Pakistan resumed exports in January for the first time in three years after the government lifted a ban in December. Pakistan is expected to produce at least 25 million tonnes of wheat in its 2010/11 crop, Finance Minister Hafiz Shaikh said earlier this month, with harvesting of the new-crop in full swing. The country consumes about 22 million tonnes a year, which is expected leave surplus for exports.
The country had already exported or contracted to sell about 1.5 million tonnes of wheat so far. Traders said rising prices have also slowed business for Australian feed wheat which was in strong demand as animal feed makers switched to wheat because of record-high corn prices. India, which has been selling large volumes of corn to Indonesia in recent weeks, is likely to see slower sales with exporters lifting prices in the face of strong demand and tight world supplies. Indian corn prices have risen to $350-$355 a tonne C&F this week, compared with cargoes sold at $330 a tonne about 10 days ago, traders said.
"Indian corn is not workable as of now for Indonesia because there is disparity of $20 between buyers and sellers," said another Singapore-trader who sells feed grains into Asia. "I don't thing there have been many deals as I offered corn to a buyer at around $345 a tonne, but he refused to take."
Dealers said buyers may be forced to take Indian corn at higher prices because of tightening global supplies, which pushed the benchmark US prices to all-time high earlier this month. "We feel that time will come when Indonesia will have to buy at levels being offered by sellers," said another trader. "Indonesia might go hand to mouth due to tight stocks."
The US Department of Agriculture has forecast corn inventories will dwindle to 675 million bushels by August 31, an 18-day supply, with global corn stocks at their tightest since the Great Depression. Traders said corn from Argentina was being offered around $370 a tonne, C&F and the feed grain from Thailand was priced near $355-$360 a tonne.
"Thailand is offering old-crop at $325-$330, free on board but the quality is not very good," the trader said. "If you add another $30 freight, the price comes close to South American corn. People will any day prefer Argentine corn over Thai."
South Korea bought 30,000 tonnes of non-genetically modified (non-GM) yellow soybeans for arrival in June and July this year via tenders, Korea Agro-Fisheries said. Asian grain importers will be closely watching US weather as corn planting gets underway in the Midwest. There are forecasts of dry weather in the coming weeks after a slow start to the season due to excessive rains. US farmers have seeded 7 percent of intended corn acreage so far this year, falling below trader expectations and the record planting pace of last year, US Agriculture Department (USDA) data showed on Monday.
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