March 9, 2012

 

 

To be able to help fill its grain deficit, Spain has imported wheat from Brazil under a special quota and shipments of US wheat are expected in the coming weeks, trade sources said Thursday (Mar 8).

 

Spanish dealers usually use so-called tariff-rate quota (TRQ) permits to import from Black Sea countries such as Ukraine and Russia, but reported hold-ups due to cold weather and competitive pricing in recent weeks diverted interest to across the Atlantic.

 

Trade sources said 150,000 tonnes of Brazilian wheat were unloaded since late January in Spain's leading grains port of Tarragona.

 

"All the Brazilian wheat's been sold, there can't be much of it left," said one dealer.

 

Brussels has awarded TRQ licences to import about 1.2 million tonnes of low- and medium-quality wheat in the first quarter from countries other than the US and Canada. Licences to import 148,000 tonnes of US wheat have also been awarded, which follows reports of sales of around 200,000 tonnes.

 

US soft red winter was quoted at EUR219 (US$290) per tonne for delivery - cost, insurance and freight - in Mediterranean ports, or about EUR5 (US$6.62) more than Black Sea origin.

 

Including discharging and storage costs, feed wheat was last quoted at about EUR223-224 (US$295-296) a tonne in Tarragona. Importers have until March 31 to exercise TRQ permits, and milder weather may allow inland waterways to thaw and make South Eastern Europe an attractive origin.

 

"Some importers are waiting to see if problems on the Danube clear up, so some cargoes may be loaded there before the spring harvest," a port source said.

 

Wheat stocks in Tarragona stood at an estimated 300,000 tonnes, with loadings at around 8,000 tonnes a day.

 

Another 68,000 tonnes of Black Sea feed wheat were due later this month, as well as 27,000 tonnes of milling wheat from Lithuania, with US wheat cargoes a possibility.

 

"With consumption what it is, the port market is in theory covered for March? Purchases ought to be made now for April and May, when consumption tends to pick up," the port source added.

 

Dealers say demand was in a lull in February due to the livestock reproductive cycle, and breeders being squeezed between rising raw material costs and sluggish wholesale meat prices.

 

In No. two port Cartagena, the roster showed a mixed 46,800-tonne cargo of wheat and corn had docked from Ukraine, as well as 39,600 tonnes of wheat from Germany, where feed wheat was quoted at around milling prices due to firm demand.

 

Spain needs to import at least 10 million tonnes of grain a year to meet demand fuelled by what is Europe's biggest pig feed industry, which makes it a major buyer on world markets.