September 14, 2010
Philippines cancels Black Sea feed wheat imports
Two Black Sea feed wheat cargoes to the Philippines amounting to 123,000 tonnes have been cancelled due to the high price in the world market, an industry source said Monday (Sept 13).
The shipments were for 63,000 tonnes from Russia for delivery in October, and 60,000 tonnes from Ukraine in November. It will be replaced with domestic corn.
"I don't think we need additional imports this year. The supply situation is not worrisome," said the industry source who has knowledge of wheat import deals. It can be replaced by local corn," the source said, adding "wash out discussions" were now ongoing among the buyers and sellers of the commodity.
Although Manila could buy feed wheat from South American suppliers following the cancellation of the two shipments, the source said this option was "not a good idea because prices have gone up."
Feed wheat futures in London are hovering at two-year highs, with November feed wheat <LWBX0> rising one pound at 160 pounds a tonne on Friday (Sept 10).
Russia has banned grain exports until after the 2011 harvest, following a drop in output due to the country's worst drought in 130 years.
About 331,000 tonnes or 29% of the Philippines' 2010 feed wheat imports had arrived in June from Brazil, the industry source said. But there was no confirmation if the expected 711,000 tonnes from the EU, or 62% of 2010 imports, had arrived in August as scheduled.
Philippine feed wheat imports were initially expected to reach 1.15 million tonnes this year, slightly higher than 1.13 million tonnes last year.
Domestic stockpile of corn remained ample amid weak demand from hog raisers, said Roger Navarro, president of Philippine Maize Federation. Yellow corn is a main ingredient in animal feeds. "Corn supply and prices should remain stable for the rest of the year," Navarro said.
He said there was no urgent need for Manila to buy more corn from the offshore markets this year. In March, a group of feed millers was reported to have bought 20,000 tonnes of corn for shipment in April. It was not clear if additional corn shipments came through after.
Government data showed the country's total corn inventory had reached 126,500 tonnes on August 1, up 16% from last month but 44.3% lower against on-year.