August 21, 2010

 

Asian mills increase purchases of Australia's wheat

 

 

Asian flour millers have stepped up purchases of Australian wheat but some traders said the pace has been slower than expected after Russia's ban on grain exports.

 

Traders said increased interest has been seen in wheat out of South Australia ports where stocks remain relatively high after a slow start to Australia's October to September marketing year.

 

Bookings show that 200,000 tonnes have been added to shipping berth allocations at South Australian ports in the past week.

 

"Export demand is picking up the US and that's starting to happen here to," said Brett Cooper, senior manager of markets at FCStone in Sydney. "The demand story is starting to happen after global consumers spent the last year or two pretty comfortable with global stocks and just buying on a hand-to-mouth basis."

 

Traders said buyers included Indonesia, Malaysia and the Sudan looking for delivery through to December.

 

"We're just plugging away with the usual Asian demand so our carry-out at the moment as of September 30 is not really changing much," said a Melbourne-based trader.

 

He said most of the business was being done out of South Australia which was offering wheat at a discount to supplies from Western Australia, the country's main grain exporting state.

 

"The Western Australian guys are still going to be carrying quite a bit of stock with the carry-out there at September 30 likely to be around 2.2 million tonnes," he said.

 

He said Australia's total carry-out for bulk wheat at September 30 could be about 4.2 million tonnes or more, compared with 3.2 million tonnes a year earlier.

 

"We're a little bit disappointed with the export pace - we would have thought the export pace out of Western Australian would have picked up more," the trader said.

 

Yemen has also emerged as a keen importer of soft white Australian wheat, booking around one million tonnes between November 2008 to the end of August, traders said.

 

Still most of the slack arising from the Russia export ban is being taken up by the US. "We haven't seen as much demand for Australian wheat as the US and the French have had - the US is starting to take up the slack at moment as their hard wheat winter values are at a discount for September," the Melbourne trader said.