Asia Importers to Buy More Black Sea Wheat, Shrug Off Ukraine Crisis
Asian buyers could buy much more than the historically typical 1 million tons of Black Sea wheat this year. Buyers in Asia are switching from Australian and U.S. wheat to wheat from Russia and Ukraine despite worries that shipments may be unreliable because of the region’s political unrest. Russian wheat with a 12% protein content is shipping to Indonesia, Asia’s second biggest wheat buyer, for $290 - $295 per ton compared to $310 - $320 per ton for comparable wheat from the U.S. or Australia, while India wheat is shipping for $305 per ton. The trend looks to continue through the next harvest as well as Australia’s new crop wheat is being priced $60 - $70 per tons higher than Black Sea supplies. Buyers believe that the unrest in the Black Sea region might even help ensure that their orders are delivered as suppliers will want to get their wheat shipped out of the region as soon as possible. The U.S. Department of Agriculture (USDA) has forecast that Russia will export 19 million tons of wheat in the year to June compared with 18.2 million tons a year before and Russia’s Agriculture Minister Nikolai Fyodorov has stated that Russia is set to export 25 million tons of grain during the 2014/15 marketing year. Because of high crop output in Europe, there will be increased competition on the Middle East and North Africa markets, meaning that the higher volume of exports from the Black Sea will likely go to Asia.
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