Asian millers are seeking rare wheat shipments from Argentina in the coming months, as a second year of drought in traditional supplier Australia cripples supplies.
Many key wheat exporting nations have faced severe droughts in recent months, and traditional sources of supply are struggling to fulfil all of Asia’s needs.
Australia lowered its wheat forecast by 13% to 19.1 million tonnes on Tuesday as a crippling drought across the country’s east coast has cut output to a 10-year low.
While at the same time Russia and Ukraine are expected to run out of surplus supplies by the end of the year, forcing buyers to seek shipments from alternative origins.
“We have lower wheat production in many exporting countries but Argentina is looking at a bigger crop,” said one Singapore-based trader.
Late-season rains have saved what was looking like a poor Argentinian harvest.
But wheat output in Argentina is expected to climb just 1.5 million tonnes — to 19.5 million tonnes from last year’s 18 million tonnes — hardly enough to offset the substantial European and Aussie losses.
Expect higher food prices and even shortages in the coming months.
GSM = Unpredictable & Extreme Weather = Crop Loss