July 16, 2008
Asia Grain Outlook on Wednesday: Prices may fall on concerns of slowdown
Grain prices in Asia may fall rest of this week on concerns of a decline in demand for agricultural products, triggered by a global economic slowdown.
Analysts in the U.S. said the broader economic downturn in the country may pressure commodities, and a developing deflationary environment could damp demand for grains.
In Asia, a few deals were struck so far this week. According to media reports, some South Korean flour millers may have bought U.S. wheat in private deals. Representatives of the flour milling companies declined to comment.
Japan's Ministry of Agriculture is seeking 76,000 metric tonnes of wheat in a tender to be concluded Thursday, less than its usual weekly purchase of 100,000-150,000 tonnes. Meantime, Bangladesh's Daily Star reported Monday that Bangladesh has received 65,631 tonnes rice from India, as part of a deal signed last year between the two governments.
Another consignment of 60,000 tonnes of rice from India will reach Bangladesh soon, the newspaper said. India is supplying the commodity to Bangladesh as an exception to its current ban on export of non-basmati rice.
Last year, India committed to export 500,000 tonnes of rice in phases because Bangladesh's rice crop was damaged by floods.
India has exported 120,674 tonnes rice to Bangladesh in March under the agreement.
In other news, downward pressure on wheat prices may be accelerated on expectations of a bumper crop in the European Union and rains in Australia's wheat-growing areas.
The EU's wheat crop is expected to be about 15%-19% more than a year ago. Also, historically high corn prices mean that this wheat is likely to be substituted in livestock feed too, both in the E.U. and around the world.
Meantime, there has been widespread rains in the wheat growing areas of western Australia over the past 24 hours, with forecast of more rains in the wheat belt up to Saturday.