Asia Set for Record Volume of Argentine Wheat in Feb, March – Traders

January 21st, 2020


Category: Grains

( – Argentine wheat shipments to Asia are poised to climb to a record high over the next two months as a drought curbs Australian production and Black Sea inventories tighten, two trade sources said.

Indonesia, Asia’s biggest importer, along with Vietnam, Thailand and the Philippines are expected to receive close to 1.2 million tonnes of wheat from the South American country, said the traders, who have access to shipping data.

“This year’s volumes of wheat coming to Asia from Argentina are substantially higher than in 2019, which itself was a record year for Argentinean supplies,” said one trader who is based in Singapore and supplies wheat to flour millers across the region.

“Argentina has a big crop to sell this year.”

Argentina’s Buenos Aires grains exchange bumped up its wheat harvest forecast for the 2019/20 season to a bumper 18.8 million tonnes from an earlier estimate of 18.5 million tonnes.

That leaves the country with a surplus of around 12 million tonnes for export in 2019/20, trade sources said.

“More than half of 1.2 million tonnes (for February and March) is heading to just Indonesia,” the trader said.

Indonesia is scheduled to receive close to 700,000 tonnes, while vessels carrying around 300,000 tonnes are expected to arrive at Vietnamese ports over the next two months.

Thailand has nearly 150,000 tonnes of Argentine wheat on the way, and the Philippines is getting close to 60,000 tonnes.

For all of 2019, Indonesia bought 1.7 million tonnes of wheat from Argentina, according to Refinitiv Eikon data, while Vietnam imported 182,000 tonnes and Thailand 396,000 tonnes.

Argentina became a key wheat exporter to Asia in early 2019 as a third year of drought curbed wheat exports from traditional supplier Australia and grain reserves tightened in the Black Sea region after a hectic pace of exports.

This year, Russia’s agriculture ministry is looking to set a non-tariff quota for grain exports of 20 million tonnes in January-June, it said in a statement on Tuesday, adding the quota would be scrapped later in the most active part of season for trading.

Australia last month cut its wheat production forecast by nearly 20% for the year through June 2020, as an unrelenting drought across the country’s east coast will likely see output fall to an 11-year low.

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