Australia signs deal to export wheat

By Reuters - Global Times Source:Reuters-Global Times Published: 2017/10/26 19:18:40

Contract inked with Vietnam for $252 a ton

Suppliers of Australian wheat have signed one of the first deals to export the crop due to be harvested in the next couple of months, helping to kick off this year's export program after more than three months of delays.

The contract to supply Vietnam with 30,000 tons of Australian Premium White wheat was signed at $252 a ton, including cost and freight, for arrival in December, said two trade sources.

Exporters typically start selling Australian wheat around July for the crop to be harvested in November and December.

But that was delayed this year after one of the worst droughts in decades drove up local prices for the grain, hitting demand from buyers abroad.

But global inventories at historically high levels have forced suppliers in Australia, the world's No.4 exporter, to reduce prices to match the international market and win business.

Prices for Australian wheat were this week being quoted at around $232 a ton, free on board, compared to $250-$260 previously.

"Australian prices have come down in the last week or so," said a Singapore-based trader at an international trading company.

"We expect more deals to be signed as Asian mills need some volumes of Australian wheat, Black Sea [type of grain] on its own is not enough," he said, declining to be identified.

Australian wheat is popular with flour millers in several Asian countries, including Indonesia, the world's second-largest importer.

"By this time last year, Australian exporters had sold close to 3 to 4 million tons of wheat," said a second trader in Singapore.

"This year, we are just talking about a few deals as of now."

Australian wheat crop yields are forecast to decline to 1.72 tons per hectare in the 2017-18 season, according to estimates from the US Department of Agriculture, down 36 percent from the previous year's record 2.7 tons per hectare.

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