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View all search resultsAsian wheat millers resume purchases after two-month hiatus
Buyers in Indonesia, the world's second-largest wheat importer, last week signed deals to purchase at least 150,000 tonnes of new-crop Black Sea wheat for July shipment, while Thai millers booked 125,000 tonnes of US wheat, two Singapore-based traders said.
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Сombines harvest wheat in a field in the Kasharsky district of the Rostov region, Russia, on July 24, 2025. (Reuters/Sergey Pivovarov)
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sian flour millers are rushing to secure wheat cargoes after an absence of more than two months, as a severe US drought and forecasts for dry weather caused by El Nino across key producing regions raise fears of tighter global supplies.
Buyers in Indonesia, the world's second-largest wheat importer, last week signed deals to purchase at least 150,000 tonnes of new-crop Black Sea wheat for July shipment, while Thai millers booked 125,000 tonnes of US wheat, two Singapore-based traders said.
Malaysian and Vietnamese millers are also making inquiries to purchase wheat, said several traders who participate in the market.
The revived buying interest comes after most importers had stayed on the sidelines since the start of the Iran war in late February, which drove up freight costs and disrupted supply patterns.
"Buyers have waited long enough for shipping costs to stabilize and prices to ease," said one of the Singapore-based traders.
"But prices have jumped and there is no resolution in sight to the Middle East crisis. In fact, prices are likely to rise further, given the weather in the US and looking at the forecasts."
Fears of declining world output have lifted benchmark Chicago wheat more than 30 percent this year, the biggest annual rise since 2010. Futures prices fell in the past three years as global wheat production climbed to all-time highs.
"We are buying July-August shipment and Black Sea is the cheapest origin right now," said a purchasing manager at a flour milling company in Southeast Asia. "Australian prices have gone up a lot."
Rising wheat prices
In the physical market, Black Sea wheat with a protein content of 11.5 percent was traded to Indonesia around US$280 per tonne, including cost and freight (C&F), up from lows of $250-$260 last year, the two Singapore-based traders said.
Australian Premium White wheat was being offered in Southeast Asia at around $305-$310 per tonne C&F, compared with $270-$280 per tonne quoted before the war, the traders said.
"The Black Sea is holding a strong price advantage in Asian markets and this has generated good Asian purchase interest in the last couple of weeks from countries including Indonesia," said a European trader involved in recent transactions to Asian buyers.
An Indonesian buyer is seeking this week 60,000 tonnes of 10.5 percent protein wheat for July to August shipment, said three European traders involved in the market, while Malaysian buyers are also looking for Ukrainian wheat sold in shipping containers at $260 per tonne C&F for delivery to Penang for May to June.
US drought and El Nino
The United States is experiencing yield-reducing drought conditions and an El Nino is expected to develop in the second half of 2026, potentially curbing crops in Asia and Australia.
The El Nino is a phenomenon stemming from the warming of the tropical Pacific Ocean waters west of South America that causes hotter, drier weather in parts of Asia and Australia.
US farmers this year will harvest their smallest wheat crop since 1972 as the drought curbs production of hard red winter wheat, the largest variety grown in the country, the US Department of Agriculture (USDA) said on Tuesday.
Global 2026/27 wheat output is projected at 819.1 million tonnes, down 24.8 million from a year ago, according to the USDA, marking a reversal after seven years of record production.
Still, Asian buyers are not yet making large forward purchases, finding comfort in ample world inventories and a strong harvest underway in Russia, the world's biggest exporter.
"We are not seeing any panic buying as there is no real shortage of wheat globally over the next four, five months," said a senior executive at an international agricultural brokerage in Sydney.
"But farmers know that supplies are going to get tight in six to eight months. They are holding on to stocks because of El Nino weather and rising input costs."
