Asian wheat importers have stepped up their purchases in recent weeks, taking cargoes from the Black Sea region as they returned to the market after a long gap. This is driven by a fall in global wheat prices to their lowest level in four months.
According to two Singapore-based traders, regional millers producing flour and animal feed have signed deals to buy close to one million metric tons of wheat to be shipped from Bulgaria, Russia, Romania, and Ukraine during August and September.
“Millers have been active, we have seen good demand as prices have dropped significantly,” said one of the traders. “Black Sea wheat is in good demand for milling, as well as animal feed.”
Wheat buyers had previously cut purchases and were running on thin supplies after global prices rallied earlier this year. Wheat prices jumped in April due to expectations of lower output in Russia, the world’s top exporter, following fears of crop damage from frost and dryness.
Now, with global wheat prices falling, Asian importers are returning to the market. Grain processors in Bangladesh and Indonesia are taking Black Sea wheat largely for milling into flour, while importers in the Philippines, Thailand, and Vietnam have been booking feed wheat cargoes.
China, the world’s biggest wheat importer, has been buying larger volumes during much of this year, but it typically sources the grain from Australia, Canada, and Europe.
The increased wheat purchases by Asian importers amid lower global prices indicate a recovery in demand from the region.