ASIA STICKS WITH AR­GENTINA

Ex­ports to In­done­sia, Bangladesh, Malaysia and Viet­nam at record lev­els

New Straits Times - - NEWS / BUSINESS -

AR­GENTINA is set to dom­i­nate Asia’s grain mar­ket for a sec­ond con­sec­u­tive year next year, with trad­ing com­pa­nies al­ready buy­ing sig­nif­i­cant vol­umes an­tic­i­pat­ing first-quarter de­mand in the re­gion.

Trade sources said this was due to drought curbs out­put in tra­di­tional ex­port pow­er­house Aus­tralia.

Wheat ex­ports from the South American na­tion to key im­porters like In­done­sia, the world’s sec­ond-largest wheat buyer, Bangladesh, Malaysia and Viet­nam have jumped to record lev­els in the course of the past 12 months, boosted by bumper har­vests.

With ship­ments ac­count­ing for more than 30 per cent of the global trade, Asia is the world’s big­gest wheat con­sumer and im­porter mak­ing its pur­chas­ing pat­terns must-read trends for the in­dus­try.

“Early next year, we ex­pect large vol­umes of wheat ship­ments to come from Ar­gentina... Aus­tralia doesn’t have much to sell,” said one of­fi­cial at an in­ter­na­tional trad­ing com­pany, here.

“Most millers are okay with the qual­ity of Ar­gen­tinean wheat and the vol­umes will be sim­i­lar to last year, if not more,” he said.

The lat­est es­ti­mate for Ar­gentina’s 2019/2020 wheat har­vest was 18.5 mil­lion tonnes, said the Buenos Aires Grains Ex­change in a re­port last week, slightly down from a pre­vi­ous fore­cast of 18.8 mil­lion tonnes due to an out­break of harm­ful fungi.

That still left the coun­try with a sur­plus of around 12 mil­lion tonnes in 2019/2020, said trade sources.

A sec­ond trader said Ar­gen­tine farm­ers had al­ready sold close to eight mil­lion tonnes of wheat to trad­ing com­pa­nies for ex­port, the bulk of which was ex­pected to land in Asia.

“Millers in North Africa and the Mid­dle East are likely to stick to the Black Sea re­gion or switch to French wheat,” said the trader. “Asians will go for Ar­gen­tinean wheat.”

Ar­gentina was the top sup­plier of wheat to In­done­sia be­tween Jan­uary and June, with more than 30 per cent mar­ket share, ac­cord­ing to the two traders, who ac­tively sold wheat to mills in the South­east Asian coun­try.

Ar­gen­tine farm­ers have al­ready sold close to eight mil­lion tonnes of wheat to trad­ing com­pa­nies for ex­port, the bulk of which is ex­pected to land in Asia. BLOOMBERG PIC

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