Demand for imported grain strong

Demand for imported grain strong

SINGAPORE (Reuter): Demand for imported corn and wheat is strong in the key Philippine and Indonesian markets in Southeast Asia, despite soaring world grain prices, industry sources said.

The Philippines will be a key importer of both corn and wheat for the remainer of 1995, while Indonesian demand for grains is on a rising trend, they said.

The Philippines is expected to tender soon for 100,000 tons of yellow corn to be used for cattle feed, local feed millers said.

Domestic corn production in the Philippines in calendar year 1995 is forecast to slip slightly to 4.40 million tonnes versus 4.52 million tons in 1994, the Agriculture Department said.

The Philippines maintains an inventory of 70,000-140,000 tons of wheat a month for domestic consumption, traders said.

Indonesia's total corn imports this year were estimated at 1.3 million tons, up from 1.1 million tons last year, said Ali Basry, consultant to the Washington-based U.S. Feed Grains Council.

He said Indonesia's 1995 corn production would be around six million tonnes -- unchanged from 1994.

Some 800,000 tons of corn were imported by Indonesia between January and August this year, with about 450,000 tons sourced from the United States.

Basry said Indonesia's 1996 corn imports would depend on the outcome of the main crop in February.

"If local production remains unchanged, Indonesia might have to import about 10 percent more (than in 1995) to keep up with the growth in the feedmeal sector," he said.

Beddu Amang, chairman of state commodities regulator BULOG said last month Indonesia imported 3.52 million tons of wheat in 1994/95 (April/March), up from 2.58 million tons in 1993/94, with 1.25 million tons coming from Australia. Other sources included Canada, Saudi Arabia and Argentina.

The United States supplied a mere 93,571 tons of the total imports in 1994/95 and 48,694 tons in 1993/94.

An industry source said Indonesia found U.S. wheat expensive and that some preferential export mechanism was needed for Washington to penetrate the Indonesian market.

Prices high

Meanwhile, the Australian Wheat Board (AWB) predicted yesterday that world grain prices should stay around current high levels for at least the next 18 months.

AWB's Marketing Manager Charles Stott said with world consumption outstripping world production for the last three consecutive years, stocks of grain have fallen, supplies are tight and prices have soared to historic highs, rising by 30 percent over the past six months.

"I believe we'll see 18 months of good prices, staying above US$200 a ton for the next five months then after that above US$150," Stott said.

Prices for Australian standard white wheat range from US$224 to $231 per ton FOB, depending on delivery.

He said prices could then drop back quite dramatically by up to $70 a ton which had to be taken into account by growers worldwide who are planning to increase areas sown to wheat next year to take advantage of the current good prices.

"We will be in a very explosive price situation and could get as high at $300 a ton" Stott said.

World consumption for 1995/96 is estimated at 546 million tons against 549.1 million tons a year earlier but production is forecast at 530 million tons compared to 523 million in 1994/95, which has added to market tightness.