ASIA STICKS WITH ARGENTINA
Exports to Indonesia, Bangladesh, Malaysia and Vietnam at record levels
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