August 17, 2012

 

Thailand imports 100,000 tonnes Indian wheat

 

 

At least five cargoes totalling 100,000 tonnes of Indian wheat have been bought by Thai flour millers at US$312-321/tonne, basis cost and freight.

 

The deals for 11.5% protein wheat are for shipment by end-October. Two cargoes were bought at US$316/tonne, and one each at US$312 and US$321/tonne, trading executives said.

 

It is the first time in eight years that Thailand is making bulk purchases of Indian wheat. Thailand imports around two million tonnes of wheat annually and traditionally buys US and Australian grades.

 

However, with cheapest grade Australian wheat priced more than US$380/tonne, cost and freight, buyers are turning to India to meet their needs. US wheat is even dearer with prices for most grades well above US$400/tonne, C&F.

 

This is yet another example of East Asian flour and animal feed millers buying Indian wheat. Recently, Indonesia and South Korea also purchased wheat from India to fill in the gaps in supply and cut costs.

 

South Korea last week purchased six cargoes of feed wheat totalling 325,000 tonnes between US$322-326/tonne, basis cost and freight for arrival by November, and all supply is likely from India. Sellers include Alfred C. Toepfer International, Starcom Resources , Nidera and Glencore International PLC (GLNCY).

 

Indonesia flour mills have purchased several cargoes of Indian wheat as well at prices ranging between US$255-300/tonne, free-on-board.

 

India has a freight advantage in Southeast Asia and with global prices rising, demand for its wheat will rise further in the next few months, said an executive at a Bangkok-based flour mill.

 

Indian wheat in the private market is now available around US$303/tonne, delivered at ports on the west coast, said a Mumbai-based executive with a global commodity trading company. India's federal government, saddled with near-record high inventories is also selling wheat to exporters on a delivered-at-port basis.

 

The government last week made its first major sale of wheat from government stocks in several years, selling around 190,000 tonnes to global trading companies, Hamburg-based Alfred C. Toepfer International and Singapore's Starcom Resources around US$302.50/tonne and US$296.68/tonne, free-on-board.

 

In a tender, Thursday (Aug 16), to export wheat from government stocks, the highest offer was US$308/tonne, FOB by Australia-based J.K International followed by the Dubai arm of New Delhi's Emmsons International (532038.BY), Emmsons Gulf DMCC's US$304.77/tonne.

 

The initial target is to export two million tonnes of wheat from government stocks. At the beginning of August, the government was holding 47.5 million tonnes of wheat more than double of the mandatory requirement, or equivalent to a third of the global trade. Annual global trade in wheat is around 135 million-145 million tonnes.

 

Smaller crops in the Black Sea region where dry weather badly hit the harvest is also pushing up demand for Indian wheat in the Middle East and North Africa.

 

Russia's output is projected to fall 20% to 45 million tonnes, and its exports to plunge by 59% to nine million tonnes, in the marketing year that started July 1, according to the latest forecast of the London-based International Grains Council. Ukraine's output is expected to fall 42% to 13 million tonnes and its exports 34% to 3.5 million tonnes, the IGC said.