Malaysia is looking to buy two to three cargoes of US or Canadian wheat before the Australian harvest starts in late October, traders said on Tuesday. "There are a few uncovered positions to fill. Malaysia will aim to buy two to three cargoes. After that we will switch to Australia," said one trader on the sidelines of a regional grain conference in Perth.
Malaysia is traditionally a medium-sized market for Australian wheat, buying around 800,000 tonnes a year. Australian and US wheat compete fiercely in Asia, despite Australia's freight advantage. But Australia's last crop was slashed by around 60 percent to less than 10 million tonnes because of drought, and exports have had to be rationed among the country's best customers. Australia's current crop, which will be harvested toward the end of the calendar year, is also on a knife-edge because of dry weather.
Malaysia's plans to buy US wheat are despite record high prices for the grain, triggered by Northern Hemisphere crop damage and uncertain supplies from Southern Hemisphere crops. In recent weeks Indonesia's Bogasari Flour Mills, the world's biggest flour miller said it was forced to buy wheat from world markets at high prices because of a lack of stocks.