Singapore — Australian Premium White wheat prices tumbled to an eight-month low at $264/mt FOB Kwinana Friday as sellers brought down offer levels sharply in an attempt to attract buyers.
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The last time the price was assessed lower was on July 25, 2018, at $255/mt FOB Kwinana.
The assessment slipped by 11% since its peak of $294/mt FOB Kwinana on January 11 this year.
Despite limited availability of APW wheat in the current marketing year, Australian wheat suppliers have lowered their offers in an effort to compete with slashing prices from origins that have already been more competitive in the Asian markets.
While the recent slump in prices have caught the attention of end-users that were previously more focused on other origins, strength in purchasing activity is yet to be seen as buyers are contemplating on whether to make some purchases now or wait to see whether prices fall further.
As a result, the market remains offer-heavy for APW wheat as sellers struggle to attract firm bids from end-users particularly in Southeast Asia.
Meanwhile, Australian suppliers are grappling to sell the abundant lower protein wheat available in the market. In the current 2018-19 harvest year, Australian Standard White has generally failed to meet the 9% protein level while there is excess Australian Noodle Wheat struggling to find demand homes, sources said.
On March 7, a 40,000-mt Australian feed cargo was sold to the Philippines at around $265/mt CFR for May shipment.
Feed cargoes from Australia are widely being built from ASW without protein guarantee and ANW, trade sources said.
Attracted by the lower ANW prices, Japan has changed their noodle blend from an 80:20 ratio to a 90:10 ratio of ANW and Australian Premium White Noodle from the start of March.
Some South Korean buyers are also buying only parcels of ANW, given the attractive prices, and blending it themselves at their flour mills.
The market remains split on the price direction. While some expect prices to continue its descent, citing new crop supply pressure from the Black Sea, others believe limited availability of APW wheat would put a floor to the price decline.
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