Asian importers turn to the EU wheat as regular supplies unavailable

Southeast Asia-based wheat importers have expressed buying interest in European wheat and are looking for price quotations for French, Romanian and Bulgarian origins as their go-to suppliers are unable to supply for key July-August loading windows.

Flour millers face low availability of offers in the market, with exports from Ukraine still unavailable and Australia - Indonesia’s biggest wheat supplier - out of the market for the next few months as the country’s port capacity is fully booked with the current strong export flows.

Importers are also looking to cover positions they had booked with Indian wheat, after the authorities first encouraged and then banned exports - despite some sellers having letters of credit open in banks prior to the May 13 cut off date.

Indian authorities have made an exception for any trades that have an LC in place, but all such deals are now being double-checked to exclude the possibility of fraud.

“There were at least five panamax-size vessels for shipment to Indonesia from India,” a Europe-based trader told Agricensus, with those volumes now facing an uncertain future until the export rules are clarified.

Given the circumstances, buyers have expanded their search for supply and are considering buying either French, Romanian or Bulgarian milling wheat, which was priced in the range of $490-496/mt CFR Indonesia, based on freight rates at around $55-60/mt.

Market sources reported bids coming from millers at around $475/mt CFR, but expect the levels to increase soon as the number of offers is unlikely to increase significantly any time soon.

Global grain importers are easing import requirements to secure supply, changing the quality specifications and adding new origins to the book as trade flows change.

Egypt, Algeria, Saudi Arabia, Iran, Thailand and the Philippines have recently amended their import terms to be able to insure stock levels comply with the likely demand ahead.

Indonesia is one of the world's biggest wheat importers, buying around 11 million mt of wheat annually, with more than 30 flour mills located in the country.

Wheat importers delivered a total of 10.95 million mt of wheat to Indonesia in 2021, sourcing preliminary from Australia (5 million mt), Ukraine (3 million mt), Canada (1.67 million mt) and Argentina (537,117 mt).