ASIA WHEAT ROUNDUP: Australian Prices Hit 3-Year High in August as Black Sea Grain Export Disruption Persists

Australian wheat prices climbed to a three-year high in August, as the disruption to Russian and Ukrainian wheat exports in the Black Sea region that began in July continued through the month. Russia and Ukraine are among the world's largest wheat exporters, and the Black Sea region is a major supplier to price-sensitive import markets across Asia and North Africa, so interruptions to its export flows tend to ripple quickly through competing origins.

Destination buyers and traders executing contracts increasingly turned to Australian origin as a replacement for Black Sea wheat, driving the Platts assessment to a record three-year high of $312/metric ton FOB Kwinana for Australian Premium White (APW) and $302/mt FOB for Australian Standard White (ASW1) wheat with no-protein guarantee on Aug. 31. Platts is part of S&P Global Energy.

The Platts APW wheat assessment rose $23/mt month over month, while the ASW1 assessment gained $20/mt over the same period. Australia, typically one of the top four global wheat exporters, often sees demand surge for its white wheat when Black Sea supply tightens, because grades such as ASW1 and APW are widely used in Asian milling and noodle applications.

Australian prices at 3-year high

Liquidity in Australian wheat was strong in the first half of August as traders sought to execute destination contracts amid the disruption to Black Sea wheat exports, although destination demand was concentrated in the containers market rather than the bulk segment.

"September and October [shipment] capacity is well sold [for Australian wheat exports], November is slightly different, we should have new crop supply by then," said an Australian trader.

"We need to see some action from buyers further into the new crop. So far, it has been quiet, however, canala and barley are likely to take up a lot of the early stem in Western Australia at least," said an Australian grains exporter.

The Australian Bureau of Agricultural and Resource Economics and Sciences raised its wheat production estimate for marketing year 2026-27 (October-September) to 29.9 million metric tons in its Australian Crop Report released Sept. 1, up from 26.7 million mt estimated in June. A larger Australian harvest would add exportable supply as the new-crop marketing year begins, a factor traders are weighing against currently elevated old-crop values.

Buyers consider other origins

With prices rising at key origins, some destination buyers began to look elsewhere. The Philippines purchased a September shipment of US Soft White Winter (SWW) wheat via a tender on Aug. 19 at $295/mt CFR Batangas and Bataan, instead of an expected ASW1 cargo.

A Vietnamese buyer also said they had purchased several cargoes of US SWW before prices rose following the Philippine tender on Aug. 19. US SWW indicative offers stood at $277.96/mt FOB Pacific Northwest for October shipment, according to Platts data. US Pacific Northwest whites are an established alternative to Australian white wheat for Asian millers, making them a natural first stop when Australian values climb.

Sources were also eyeing Indian wheat, which, although priced at uncompetitive levels of $325/mt FOB according to an Indian trader, could become a key supplier in the global market if the Black Sea disruption continued to push prices higher.

A deal for ex-Khandla wheat was already concluded in August with Sri Lanka as the destination, marking "the first shipment in many years," the same trader said. India has largely been absent from global wheat export markets in recent years, with government export restrictions in place since 2022 keeping its shipments minimal.

What's next in Asian wheat markets?

Many Southeast Asian buyers remained short on wheat supply, with an analyst estimating Indonesian coverage at 80% or more for October and November shipments. Southeast Asia is a structurally wheat-deficit region that relies on imports to meet its milling and feed needs, leaving buyers there with limited alternatives to paying up when key origins are disrupted.

"I think some are still looking for this period. Maybe to cover their short gap while monitoring the Black Sea situation," said an Indonesian miller source.

Buyers are expected to maintain their procurement strategy of purchasing containers.

"If the Black Sea grain corridor is opened, futures will correct fast, so it is a struggle for the buyers to decide whether they can buy a full bulk vessel at this moment. Anyone who buys first, if the market drops, they will be hurt the most," said a Singapore-based grains analyst.

In Vietnam, a flour miller said: "High protein wheat [prices] are going up faster than low protein. Protein is another concern for new crop wheat."

Platts is part of S&P Global Energy.

Source: Platts