July 31, 2008

Slide in global wheat prices helps Philippines pay less


The Philippines is paying about US$80 a tonne less for wheat imports from the US and Canada compared to a month ago due to the recent slide in global prices, Teddy Deocares, a trader with Manila-based Pilmico Flour Mills, said Thursday (July 31, 2008).


Global wheat prices are declining on expectations of a record harvest this fall. CBOT wheat contracts have fallen 34.5 percent since the high of US$12.45/bushel reached on March 13.


The landed cost of US soft wheat in the Philippines has declined to US$390/tonne, on a cost and freight basis, while Canadian spring wheat is arriving at around US$470/tonne.


Still, the decline is unlikely to boost demand because prices are higher compared to a year ago. The high prices have led to a decline in demand, Deocares said.


"As of date, wheat imports are down 5 percent on year,' he said adding that the country may import 1.9 million tonnes of wheat this year, 100,000 tonnes less than imports last year.


Deocares also said any further fall in global prices may not encourage traders to import more, as most flour millers have already finished their annual wheat purchase.

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