Australian wheat exports are set to face stiffer competition as Pakistan, which resumed exports after three years, pours grain from its new crop into the market and offers competitive prices to millers in Asia, the Middle East and Africa.
Overseas shipments by Australia - the grain''s fourth largest exporter - have already suffered from the country''s strengthening currency, while a return of Black Sea cargoes, after last year''s drought, promises to worsen the situation. Black Sea wheat will hit markets from September, raising the stakes in the trade of lower grade feed wheat, heaps of which are lying across Australia.
The stream of supplies will also weigh on the benchmark Chicago wheat prices - already down nearly 9 percent this year, potentially easing global concerns over food inflation. "There is around $80 spread between the two origins, which makes it attractive for millers to take Pakistani wheat, even though Australian is better quality," said one Singapore-based grains trader with an international trading company.
"For July and August shipment there is good scope for Pakistani wheat after that the Black Sea region will become active." Australian wheat sales have slowed in the past few weeks as a strengthening domestic currency has lifted prices for overseas buyers, while Pakistan has dumped some one-and-a-half million tonnes into the global market since it resumed overseas sales.
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