08/16/2012
-- U.S., Black Sea region drought ups demand for Indian wheat
-- Indian wheat at least $60/ton cheaper than Australia
-- Indian wheat more than $65/ton cheaper than U.S. corn
-- Thailand buys Indian wheat at $312-$321/ton, C&F
-- Indonesia, South Korea also buying Indian wheat to cut costs
By Sameer C. Mohindru (WSJ)
SINGAPORE--Thai flour millers have bought at least five cargoes totaling 100,000 metric tons of Indian wheat at $312/ton-$321/ton, basis cost and freight, trading executives said Thursday.
The deals for 11.5% protein wheat are for shipment by end-October; two cargoes were bought at $316/ton, and one each at $312 and $321/ton, they said.
It is the first time in eight years that Thailand is making bulk purchases of Indian wheat. Thailand imports around 2 million tons of wheat annually and traditionally buys U.S. and Australian grades.
However, with cheapest grade Australian wheat priced more than $380/ton, cost and freight, buyers are turning to India to meet their needs. U.S. wheat is even dearer with prices for most grades well above $400/ton, 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 totaling 325,000 tons between $322 and $326/ton, 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 (>> GLENCORE ADR).
Indonesia flour mills have purchased several cargoes of Indian wheat as well at prices ranging between $255 and $300/ton, 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 $303/ton, 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 tons to global trading companies, Hamburg-based Alfred C. Toepfer International and Singapore's Starcom Resources around $302.50/ton and $296.68/ton, free-on-board.
In a tender, Thursday, to export wheat from government stocks, the highest offer was $308/ton, FOB by Australia-based J.K International followed by the Dubai arm of New Delhi's Emmsons International (532038.BY), Emmsons Gulf DMCC's $304.77/ton.
The initial target is to export 2 million tons of wheat from government stocks. At the beginning of August, the government was holding 47.5 million tons 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 tons.
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 tons, and its exports to plunge by 59% to 9 million tons, 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 tons, and its exports 34% to 3.5 million tons, the IGC said.
-- U.S., Black Sea region drought ups demand for Indian wheat
-- Indian wheat at least $60/ton cheaper than Australia
-- Indian wheat more than $65/ton cheaper than U.S. corn
-- Thailand buys Indian wheat at $312-$321/ton, C&F
-- Indonesia, South Korea also buying Indian wheat to cut costs
By Sameer C. Mohindru (WSJ)
SINGAPORE--Thai flour millers have bought at least five cargoes totaling 100,000 metric tons of Indian wheat at $312/ton-$321/ton, basis cost and freight, trading executives said Thursday.
The deals for 11.5% protein wheat are for shipment by end-October; two cargoes were bought at $316/ton, and one each at $312 and $321/ton, they said.
It is the first time in eight years that Thailand is making bulk purchases of Indian wheat. Thailand imports around 2 million tons of wheat annually and traditionally buys U.S. and Australian grades.
However, with cheapest grade Australian wheat priced more than $380/ton, cost and freight, buyers are turning to India to meet their needs. U.S. wheat is even dearer with prices for most grades well above $400/ton, 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 totaling 325,000 tons between $322 and $326/ton, 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 (>> GLENCORE ADR).
Indonesia flour mills have purchased several cargoes of Indian wheat as well at prices ranging between $255 and $300/ton, 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 $303/ton, 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 tons to global trading companies, Hamburg-based Alfred C. Toepfer International and Singapore's Starcom Resources around $302.50/ton and $296.68/ton, free-on-board.
In a tender, Thursday, to export wheat from government stocks, the highest offer was $308/ton, FOB by Australia-based J.K International followed by the Dubai arm of New Delhi's Emmsons International (532038.BY), Emmsons Gulf DMCC's $304.77/ton.
The initial target is to export 2 million tons of wheat from government stocks. At the beginning of August, the government was holding 47.5 million tons 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 tons.
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 tons, and its exports to plunge by 59% to 9 million tons, 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 tons, and its exports 34% to 3.5 million tons, the IGC said.
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