Tunisia’s grains office issued a tender to purchase 50,000 tonnes of milling wheat, European traders said on Tuesday. It was optional origin with a bidding deadline of Wednesday, Aug. 4.
The tender was in two 25,000 tonne consignments, one for shipment between September/October and the second between October/November.
The Tunisian office also tendered earlier on Tuesday for 50,000 tonnes of barley.
The purchase of 50,000 tonnes of soft milling wheat on Wednesday included an unusual purchase option of 25,000 tonnes of French, German or U.S. origin.
“It looks like the harvest problems in Russia and Ukraine are starting to push wheat business to other regions,” one trader said. “A Tunisian purchase without a Black Sea origin option is unusual.”
Tunisia generally buys wheat giving the seller the option of selecting the origin, which has meant Tunisian business overwhelmingly going to the Black Sea region in past years.
These purchases are taking place as Tunisia’s grain harvest is likely to be less than 1.2 million tonnes, according an official with the Tunisian Agriculture Union, revising downward his previous forecast.
“As far as final forecasts for the season are concerned, it’s not yet clear but I think it won’t exceed 11 or 12 million quintals (1.1 or 1.2 million tonnes),” a member of the union’s executive board told Reuters. The same official had in June predicted a harvest of 1.6 million tonnes.
He did not give a reason for the new, lower estimate, but officials have previously said poor rains had affected the crop. Tunisia’s grain harvest last year was 2.5 million tonnes.
The impact of unfavorable weather events on crops in recent weeks has led FAO to cut its global wheat production forecast for 2010 to 651 million tonnes, from 676 million tonnes reported in June.
But despite production problems in some leading exporting countries, the world wheat market remains far more balanced than at the time of the world food crisis in 2007/08 and fears of a new global food crisis are not justified at this point, FAO said.
A continuing, devastating drought afflicting crops in the Russian Federation, coupled with anticipated lower outputs in Kazakhstan and Ukraine have raised strong fears about the availability of world wheat supply in the 2010/11 marketing season.
Wheat Balance, The turmoil in global wheat markets, which has intensified in recent weeks, is evidence of the growing dependence on the Black Sea region, an area renowned for erratic yields, as a major supplier of wheat to world markets. In addition, an expected production decline in Canada, another major producer and exporter of wheat, has reinforced market worries.
International wheat prices have jumped by over 50 percent since June. This rapid increase in prices is prompting concerns about a repeat of the crisis of 2007/08.
But after two consecutive years of record crops, world inventories have been replenished sufficiently to cover the current anticipated production shortfall. Even more importantly, stocks held by the traditional wheat exporters, the main buffer against unexpected events, remain ample.
External factors, including the macroeconomic environment and developments in other food markets, which were major drivers behind the surge in international prices in 2007/08, are not posing a threat so far, FAO said.
The latest downgrading of world wheat production forecast for 2010 points to a tighter supply situation and increases the likelihood of higher wheat prices compared to the previous season. However, fears of a global food crisis are unwarranted at this stage.
On the other hand, should the drought in the Russian Federation continue, it could pose problems for winter plantings in that country with potentially serious implications for world wheat supplies in 2011/12.
While markets have focused intently on Russia, concerns have also started to creep on in the fate of crops in world number 4 exporter Australia, with wheat in a key state under threat from dry conditions.
wheat crops in Western Australia, the country’s top exporting state were also under threat from dry weather but favourable conditions elsewhere could make up for any crop loss, analysts said.
Any indication that the crop in Australia, the world’s fourth largest wheat exporting nation, is endangered could put further pressure on world market prices.
