SINGAPORE/CHICAGO?CANBERRA (Nov 21): Wheat growers in several exporting countries are reluctant to sell their crops with prices near four-year lows, traders, farmers and millers say, leaving flour makers with dwindling supplies and vulnerable to any potential upswing in prices.

Typically grain processors buy wheat three- to four months in advance. But millers in Asia, including Indonesia, the world's No. 2 wheat importer, are currently covered for about two months, and in the Middle East, most grain processors only have up to 45 days of supplies, two millers and a trader said.

The limited supply held by flour makers reduces their buffer against any production shortfalls that would trigger a rally in world prices, with global reserves already projected to reach a nine-year low, and fuel food inflation.

Farmers are hoarding their crop as global wheat prices have slumped to their lowest since 2020, on solid output in Australia and Argentina, and on improved growing conditions in major exporting regions including the US and the Black Sea region.

Wheat sales in Australia, the world's fourth-biggest wheat exporter, are running at half the pace of last year at 500,000 tonnes contracted for November shipment.

At the same time, farmers in the US and parts of the Black Sea region are storing grains gathered earlier this year in silos, hoping for higher prices, industry players said.

"Farmers are not happy with the current price being offered to them," said a grains trader at an international trading firm in Singapore. "Farmer selling is very slow, and it is not just Australia where the harvest is going on; it is the same situation in several exporting countries."

Farmers hold out

In the physical market, Black Sea wheat with 12.5% protein is being offered at US$265 (RM1,183) a metric tonne, including cost and freight (C&F) to Asia, down from US$275 a couple of weeks ago. New-crop Australian Premium White wheat is quoted near US$280 a tonne, C&F, down from US$290.

"Prices have come off pretty dramatically. And personally, yeah, I am not selling any wheat at the current stage," said Cordell Kress, a farmer from Rockland in the northwestern US state of Idaho.

"If you are not needing money right away, it is kind of just store it or hold on to it and hope for better prices, or some other problem in Russia or Australia that will cause our prices to go up here domestically."

Kress grows primarily soft white and hard red spring varieties of wheat.

In Australia, farmers are selling other crops instead.

"You have very strong sales of chickpeas for cash flow, and now, we are getting strong sales of canola into the current prices," said Rod Baker at Australian Crop Forecasters in Perth.

Tight supply ahead

Along with lack of supply from farmers, high interest rates have deterred millers from stocking up on wheat, leaving them exposed if prices rise.

"Lower supply cover does leave us vulnerable, but with high interest rates, it doesn't make sense to hold large stocks," said one Dubai-based purchase manager at a flour mill in the Middle East.

Even with robust southern hemisphere production, global wheat stockpiles are projected by the US Department of Agriculture to shrink to a nine-year low by mid-next year.

"Wheat crops in the northern hemisphere still have to go through crucial development stages; any issues with the weather until harvest in July can trigger a rally in prices, given how tight the inventories are," said Ole Houe, director of advisory services at IKON Commodities in Sydney.

In a slight reprieve for millers, attractive interest rates have prompted Russian farmers, who had been withholding their crops, to change tack and sell crops, so they can deposit money in banks.

But top wheat exporter Russia might be running out of supplies. Moscow's grain export quota, to be in place from February to June, could be nearly three times smaller than the 29 million tonnes a year earlier.

Source: Theedgemarkets

BANGKOK (Nov 21): Thailand's economy is expected to grow 2.7% this year, helped by an anticipated annual rise of 28% in foreign visitors to 36 million, Prime Minister Paetongtarn Shinawatra said on Thursday.

Southeast Asia's second-largest economy will grow more than forecast in 2025, and the government will accelerate investment spending of more than 960 billion baht (US$27.74 billion, or RM123.6 billion), she told a business forum.

"The economy is in the recovery phase. In each quarter, we have done better than expected," she said.

Thailand's economy grew 3% in the July-September quarter annually, the fastest pace in two years and beating expectations. But officials and analysts expect increased challenges next year, including the fallout from trade wars.

Paetongtarn said the government would seek support measures if the United States takes action on countries with which it has trade deficits, which would include Thailand and China.

Thailand's exports accounted for 60% of gross domestic product (GDP), with 10% of shipments going to the United States, she added.

The government is confident that it will stay in power until the end of its term in 2027, and foreigners can be assured that investment plans will not be changed, Paetongtarn said.

The government will announce its 90-day performance on Dec 12, including future policies.

The State planning agency this week predicted growth of 2.3% to 3.3% in 2025.

Last year's growth was 1.9%, lagging regional peers. The economy has recovered from the pandemic only slowly, hobbled by a weak manufacturing sector and high household debt levels.

Source: Theedgemarkets

High household debts and expected policy changes under a new Donald Trump administration are major systemic risks facing Korea's financial system, a poll by the central bank showed Thursday.

According to the survey of 78 financial and economic experts about risk factors for the financial system, 26.9 percent, the largest share, pointed to surging household debts and growing burdens of repayment as a No. 1 issue of concern.

One in five respondents, or 20.5 percent, cited potential changes in U.S. policy measures under Trump as a major risk factor, followed by 9 percent mentioning the impact of major economies' pursuit of industry policy that prioritizes national interests of their own.

The respondents also said weak domestic demand and difficulties of the self-employed and small businesses are feared to pose a threat to the domestic financial system.

The survey was conducted by the Bank of Korea earlier this month.

In the third quarter of 2024, household credit rose by the most in three years to stand at 1,913.8 trillion won ($1.37 trillion) on a marked increase in mortgage loans.

The figure logged the largest for any quarterly tally since 2002, when the BOK began compiling the relevant data.

Last month, the BOK lowered its benchmark interest rate by a quarter percentage point to 3.25 percent in a first monetary policy pivot in more than three years on easing inflation and sagging domestic demand.

But it remains cautious about monetary loosening amid concerns about rising home prices in Seoul and the surrounding area and household debts, officials have said. (Yonhap)

Source: Koreatimes