April 20, 2010

 

Australian wheat prices challenged by Black Sea supply

 
 

Wheat shipments from Australia into Southeast Asia are facing a rising challenge this year from lower-cost Black Sea region supplies amid a global glut.

 

"Black Sea wheat is probably the biggest competitor for us at the moment with wheat prices of around US$160 per tonne," said Tom Puddy, wheat marketing manager for CBH Group's export division. "They can land wheat cheaper into Southeast Asia than we can get it up there, but in saying that, people are still prepared to pay a premium for Australian white wheat," he said.

 

Grain exporting countries including Australia are battling for markets in the midst of a bumper harvest. "Export prices have come down and it has also become a challenge to market wheat competitively," Puddy said. ''Shipments from Australian ports in March were probably about 1.2 million tonnes (US$205–210 per tonne), based on shipping statistics and it was likely to continue at that rate per month,'' he said.

 

''China bought about 500,000 tonnes to rebuild stockpiles and may buy as much as 700,000 tonnes of Australian wheat,'' Puddy added.

 

Output from the next crop, which farmers begin planting this month, may increase to 21.9 million tonnes, said the country's commodity forecaster on March 2. By May 31, before the North American harvest, global stockpiles will reach an eight-year high of 195.82 million tonnes, the USDA said on April 9.