October 29, 2008

US wheat sales to South, Southeast Asia lower on-year

US wheat sales to major buyers in South and Southeast Asia are down 600,000-700,000 tonnes on year, in line with an overall projection of lower US wheat exports globally in the 2008-09 marketing year, an executive with US Wheat Associates said Tuesday (October 28).

Wheat output is expected to be higher in the European Union and Canada this year, while there are also expectations of good crops in Australia and Argentina later this year, which will affect sales from the US, the world's No. 1 wheat exporter.

"There is greater competition from wheat of other origins, especially Red Sea exporters such as Ukraine and Russia, which are selling cheaper wheat," said Mark Samson, vice president (South Asia) of USW, an industry lobby group.

He added that another major reason for the lower sales in the region this year was that Pakistan and Bangladesh, which were major buyers of US wheat in 2007-08, haven't bought any US wheat so far this year.

Exports to South and Southeast Asia were around 1.98 million tonnes up to Oct. 16 in the marketing year that began June 1, compared with 2.7 million tonnes in the same period of 2007-08.

Samson said Asian buyers are also waiting to see how the Southern Hemisphere crops in Australia and Argentina shape up by December-January before committing further purchases.

However, Samson said the outlook for US wheat exports is robust for the rest of the year, as a combination of lower wheat prices and low ocean freight costs will encourage Asian buyers to stock up their inventories.

"The better quality of US wheat will also help us get customers," he added.

Samson said most Asian buyers are currently concluding purchases for March 2009 shipment.