Rising Australian wheat prices are forcing Asian buyers to look for alternatives

The halt in grain exports from the Black Sea region has boosted demand for Australian wheat, pushing up prices and forcing Asian buyers to look for alternatives. At the end of August, Australian Premium White (APW) prices reached $312/t FOB Kwinana and Australian Standard White (ASW) prices reached $302/t, making Australian grain less competitive.

 

One alternative option was American wheat. Thus, on August 19, the Philippines purchased American Soft White Winter Wheat for delivery in September instead of the planned shipment of Australian ASW at a price of $295/t CFR Batangas and Bataan. Vietnamese importers also contracted several shipments of wheat from the United States.

 

Indian wheat prices remain high at $325/t FOB, but could improve if the Black Sea export ban supports world prices. In August, buyers from Sri Lanka signed a deal to supply Indian wheat for the first time in many years.

 

However, importers from Southeast Asia are in no hurry to buy large shiploads of wheat, waiting for the problems in the Black Sea region to be resolved, so they are buying only the necessary container loads of wheat to cover immediate needs.

 

Market participants understand that if exports from the Black Sea resume, grain quotes will drop sharply, so they almost never buy large batches at the current high prices.

 

Thus, blocking Black Sea exports not only supports prices and demand for Australian wheat, but also forces Asian importers to actively seek alternative sources of supply.