Asian Buyers are Coming Back to Black Sea for Cheaper for Coarse Wheat

09 July 20133 min reading
Asian buyers are heading towards Black Sea region instead of India and Australia for cheaper products in coarse wheat supply representing a lower segment after 3 years. Not supplying coarse wheat from the producers in Black Sea region for a while; the Asian buyers are turning their faces to Black Sea region again as the coarse wheat prices in India and Australia are higher. According to some Russian news; wheat buyers from Asia want to replace the Indian and Australian products in lower segment feed market with the cheaper supplies in Black Sea region. But quality-sensitive consumers in Asia are unlikely to substitute their food supplies with Russian and Ukrainian grain, despite a ban on U.S. white wheat by major consumers Japan and South Korea. Thailand and the Philippines have already bought some 200,000 tons of Black Sea wheat in recent deals for animal feed .Traders expect a flow between 2 and 2.5 million tons from Black Sea to Asia in the year to June 2014. “Black Sea wheat is going to corner the Asian feed market as it is the cheapest origin as of now,” said a trading manager with an international trading company in Singapore and he continues as: “On the milling side there is not too much excitement but they might sell some cargoes here and there to buyers who use low-quality wheat for blending.” Australia dominated Asia’s animal feed market in 2010-11 and 2011-12 as the country produced large volumes of lower-quality wheat after unseasonal rains for two consecutive seasons. India has been aggressively selling cargoes in 2012-13. But wheat prices in Australia have firmed in recent months as supplies tighten following robust exports since September. Thailand bought some 150,000 tons of wheat from the Black Sea region this month at around $280-$285 a ton, including cost and freight, compared with a similar variety of Indian wheat quoted at about $320-$325 a ton, traders said. And also it is stated that the Philippines took one cargo of around 50,000 tons at $282 a ton. Buyers will be choosier for food wheat even though supplies have tightened in Japan and South Korea, which have shunned U.S. white wheat imports since late May after the discovery of an unapproved genetically engineered strain in the Pacific Northwest. “Currently we are considering alternatives from three countries that we import from,” said Toru Hisazome, in charge of grain trading at Japan’s farm ministry, referring to substitutes for U.S. western white wheat and he continues as: “We are trying to see if there are replacements available in the U.S., Canada and Australia, and we are trying to import samples for tests.” It is stated that Japan prefers to stick to its traditional suppliers as it knows that it would take time to set up new systems to check pesticide residues for shipments from other origins.
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