October 28, 2019

  

Philippines tenders for feed wheat, prefers Australian origin

 

 

The Import Group in the Philippines has issued a buy tender closing on Friday for three positions of 55,000 tonnes of feed wheat for shipment periods between December to February, sources told S&P Global Platts.

 

The feed buying group indicated Australia as its preferred origin, followed by the Black Sea and European Union. A member of the buying group said the reason was due to the shorter voyage and preferred quality for poultry.

 

"We never know what could happen with the ASF (African swine fever) issue," the buyer added, hinting at a shift away from swine towards poultry.

 

The group is also open to other origins, like Argentina, Canada and the United States, and off-specification feed wheat if the price discount is significant.

 

The standard specifications are as follows: Test Weight: minimum 72 kilogram/hectolitre; Moisture: maximum 14%; Foreign Matter: maximum 2%; Sprouted: maximum 5%.

 

The buying group will be comparing feed wheat price spreads between the origins and the quality differentials, and with local corn prices.

 

The sharpest feed wheat offer indication was heard at US$236/tonne CFR from Argentina for January shipment, which translates to US$252.50/tonne after accounting for the 7% import duty which Australia is exempted from.

 

Platts assessed Australian Standard White wheat, which competes for feed demand, at US$236/tonne FOB Kwinana Thursday, which roughly equates to US$253-254/tonne CFR for December-January shipments after accounting for US$17-$18/tonne freight for a Supramax vessel.

 

Local corn prices are much more competitive at US$217-221/tonne, but consistency in quality is a persistent issue. Buyers have also expressed concern on the reliability of local corn supply, citing a tendency to hike prices when a major buyer or group enters the market to purchase.

 

Poultry feed is generally more flexible than swine feed in terms of switching between feed grains, as swine require a portion of feed wheat to pelletise and bind the feed mix.