East Asian importers buy record volumes of Indian wheat

Key importers in east Asia have stepped up their Indian wheat purchases this year, with record volumes scheduled to be shipped to South Korea and Vietnam in early April, following India's bumper harvest and declining wheat and corn arrivals to the region from other parts of the world.

About 72,600t of wheat are scheduled to be shipped to Vietnam by the middle of next week from India's Kandla port. At the same time, combined volumes of South Korea-bound wheat cargoes between mid-March and the first week of April were seen at 270,000t, line-up data show.

The Philippines, Yemen, Oman, the UAE, Qatar and Bangladesh — the primary buyer of Indian wheat — were also seen to receive cargoes from Kandla, as well as the port of Mundra, shipped between early March and April.

India resumed its wheat exports to South Korea this year after a six-year break. Its combined shipments since the start of the country's wheat 2021-22 marketing year in April 2021 and January 2022 hit 131,400t. South Korea last imported large volumes of Indian wheat in 2013-14, when exports totalled 546,200t.

Exports to Vietnam also picked up this year for the first since 2014-15, totalling 15,700t in April 2021-January 2022. With shipments to Vietnam previously peaking at 77,000t in 2013-14, currently scheduled cargoes would bring Vietnam's wheat receipts from India to a record.

This comes as India's bumper harvest has boosted the country's exports to all-time highs in 2021-22. Shipments of wheat totalled 5.96mn t in April-January, up from 1.19mn t in the same period in 2020-21, including new east Asian markets such as Indonesia and the Philippines.

Most east Asian buyers initially turned to India for feed wheat supply in a bid to replace reduced arrivals of corn from Brazil. But more recently, shipment disruptions from Ukraine and Russia, paired with logistical limits to wheat shipments from Australia prompted the region to turn to India for milling wheat as well.

South Korea's corn imports fell to 7.34mn t from 7.87mn t in the first eight months of the country's 2021-22 marketing year (July 2021-June 2022), with receipts of Brazilian crop falling to just 741,000t from 2.4mn t a year earlier. At the same time, the country's wheat imports rose to 3.2mn t from 2.37mn t in July 2020-February 2021.

South Korea's higher feed wheat purchases meant other producers of the crop also stepped up exports to the destination, with receipts from Bulgaria and Romania reaching new highs.

But the recent decline in Argentinian corn prices, paired with expectations of record corn production in Brazil in the coming harvest, could bring east Asian buyers back to corn purchases. South Korea was heard to have booked an Argentinian cargo of corn this week at a 50-55¢/bu premium over the Chicago Board of Trade July corn futures contract for June shipment — equalling $380/t cfr — implying that the country's corn import prices reached parity with those of Indian wheat.

By Bilal Muftuoglu