Pakistan has resumed wheat exports for the first time in three years, selling cargoes to Bangladesh and Myanmar and more deals are likely as the nation takes advantage of rising global prices and surplus stocks at home, following last year''s bumper harvest.
The deals come as fears of global food inflation grow, with devastating floods damaging crops in Australia, forecasts of US corn inventories sliding to uncomfortable levels and dry weather hampering production in Argentina.
Asia''s third largest wheat producer, Pakistan has sold 200,000-500,000 tonnes mainly to Bangladesh and Myanmar and international traders are taking positions for more deals after Islamabad lifted a ban on overseas sales last month. "Pakistani wheat is now competitive, they are actively selling cargoes for the last one week or 10 days," said one trader with an international trading company in Singapore.
"Traders are taking positions in the domestic market to corner more supplies for exports." The benchmark US wheat and corn climbed nearly 50 percent in 2010 on tightening supplies of grains and recent price surge have stoked worries over food inflation, already in double digits in Asia''s top consumers China and India.
On Thursday, Chicago corn rose 1 percent to its highest in 2-1/2 years, while soybeans were steady after 4 percent gains in the previous session, buoyed by a surprisingly steep reduction in global supply of grains and oilseeds forecast by the US government. Wheat has risen nearly 2 percent in as many trading sessions. US stockpiles of corn and soybeans will be drawn down to uncomfortably thin levels this year, according to a government report on Wednesday that sent grain prices soaring and added to concerns over surging world food prices.
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