April 11, 2011
Cheaper Southeast Asian feed wheat resulting in higher grain purchases
Imported feed wheat on a delivered basis is cheaper by up to US$80 per tonne in Southeast Asia and this is leading to a significant shift in feed grain purchases in the region, trading executives said on Friday (Apr 8).
Buyers in Vietnam, the Philippines and Indonesia are already snapping up several hundred thousand tonnes of Australian feed wheat to substitute for corn in animal feed.
US No.2 corn for shipment to Southeast Asia in May and June from the Gulf region is being offered at around US$387/tonne, basis cost and freight. Australian feed wheat for June shipment is available around US$305-US$310/tonne, basis cost and freight.
Australian feed wheat is at least 20% cheaper than US corn, said a Singapore-based executive at a global trading company.
It is rare for feed wheat to be sold at such a heavy discount to corn. In early August last year, when Russia banned grain exports, feed wheat was trading at a US$30-$35/tonne premium to corn, on a delivered basis.