February 25, 2009

Indonesia may boost wheat imports from the US and Canada due to port congestion in Australia, an industry official said.

Indonesia, which imports all of its wheat requirements, joins South Korea at the prospect of switching to US and Canadian wheat since Australia is currently unable to provide them sufficient supply.

CBH Group, Western Australia's largest grain handler, said Tuesday (Feb 24) that the state's ports may remain congested into March.

Australia currently accounts for about 30 percent of Indonesia's total wheat imports, about the same as the US' 32 percent, said Franciscus Welirang, the chairman of the Indonesian Wheat Flour Producers Association.

Welirang said Australia's share may shrink if the port problems persist.

Indonesia may increase wheat imports by 5 percent to 4.7 million tonnes this year due to rising demand, Welirang said.

South Korea is also seeking wheat suppliers from the US to refill inventories amid Australia's port problems, said Park Yang Jin, senior manager at the business department at Daehan Flour Mills Co.

Australia's port congestion was caused by limited transport capacity between farms and ports, a delayed harvest and the first year of deregulated wheat exports, according to the Australian Grain Exporters Association.

Australia scrapped a wheat export monopoly last year, opening the market to 22 grain traders including Cargill and Glencore International.

Indonesia bought 60,000 tonnes of US soft white wheat for April, said Mark Samson, vice president for South Asia at US Wheat Associates in Singapore.