Asian buyers turn to Australian, Argentine wheat amid Black Sea disruptions

SINGAPORE: Asian wheat importers have bought at least half a million metric tons ​of Australian and Argentinean wheat in recent ​deals, three trade sources said, as buyers scramble to replace Black Sea ​cargoes delayed by attacks on vessels and grain export infrastructure.

Importers in the region, including Indonesia, the world's second-largest wheat buyer, are paying sharply higher prices for alternative supplies, they said, with several countries relying heavily on imports to meet domestic ‌demand.

"There have been ⁠bulk ⁠deals in the last one week to 10 days for Australian as well Argentinian wheat to fulfil urgent needs," said one ​Asian-based trader at an international trading company which supplies wheat to millers in the region.


"Importers are trying to ​take alternative shipments for cargoes that have not arrived from Russia and Ukraine."

Global wheat importers are facing tight supplies as Russian and Ukrainian attacks on ports and vessels have disrupted grain terminals, forcing shippers ​to delay or cancel loadings of dozens of cargoes during the ⁠peak export ‌season.

U.S. agricultural commodity group ADM said on Wednesday that a drone strike on ​August 31 ​damaged its UEP grain terminal at the Ukrainian Black Sea port of Odesa.

Buyers ⁠paid around $315-$330 per ton, including cost and freight, for Australian Premium ​White wheat, while deals for Argentinean wheat were concluded around $310-$315 per ton, traders ​said.

This compares with most Black Sea cargoes booked around $260 to $280 per ton for August-September arrivals.

Benchmark Chicago futures have climbed about 35% since late June, fuelled largely by a shortfall in Black Sea supplies, while cash prices have jumped across rival exporters Argentina, Australia and the United States.

CBOT wheat reached its highest level in 3-1/2 years on Tuesday after reports Moscow had rejected a moratorium on attacks in ‌the Black Sea region and launched overnight strikes on Ukrainian port infrastructure.

Grain processors in Asia have booked about 2.0 million to 2.5 million tons of Black Sea ​wheat for July-September ​shipment, or about 30% to ⁠50% of import demand. Yet growing shipping delays have fuelled concerns that a portion of the grain may fail to reach buyers.

Besides Indonesia, other Asian buyers of Black Sea wheat include Bangladesh, Vietnam, Malaysia, ​Thailand and Sri Lanka.

While buyers are securing bulk volumes of Australian and Argentine wheat, some have turned to container shipments to meet immediate needs, traders said.

"Some millers are preferring containers as they have agreed with suppliers to further delay the arrival of Black Sea cargoes," said a second Asia-based trader. "They don't want to take on too much exposure to high prices, so they are using containers to meet their immediate needs."