SINGAPORE, Aug 1: Pakistan, which has made inroads in the Southeast Asian wheat market by striking sales to Vietnam, has found another customer in Malaysia and is hopeful of a few sales to Indonesia, traders said on Thursday.

As regional grain traders await the outcome of Pakistan’s latest export tender for 100,000 tons, they expressed the hope for more sales from the South Asian origin to Southeast Asia, although it faces a big hurdle — aggressive Indian sales.

“Pakistani wheat has gone into Malaysia and I have not heard them complaining about anything,” said a Singapore-based regional grains trader, dealing in South Asian-origin wheat.

Earlier this year, Pakistan made its first wheat sales in the Southeast Asian region in many years with deals to Vietnam, adding to the already stiff competition between India and China.

Regional traders said Vietnam, after finding Pakistani wheat of acceptable quality, had booked more contracts recently and a few more were being negotiated.

“Vietnam has bought some more Pakistani wheat — about 20,000 tons — in the past few days. In addition to that, a lot of containerised wheat is also going to Vietnam from Pakistan,” said another Singapore-based grains trader.

Islamabad deregulated its wheat exports last year to allow private participation in trade. Pakistan is hoping to export about 1.2 million tons of wheat in 2002 compared with just 50,000 tons last year.

Pakistani wheat has found a significant market in the Middle East and some cargoes have even gone to Europe, but they have been finding it difficult to compete on price with India and China in the Southeast Asian region.

“Indonesia is seriously looking at Pakistani wheat and I am confident of more sales to Malaysia,” said one trader. “But the problem in the Malaysian market is that traders there are getting attracted by low-priced Indian offers,” said one trader.

“Also, I have given some Pakistani wheat samples to the Philippines but nothing has been worked out,” the trader said.

Traders said the landed cost of Pakistan wheat in Southeast Asia was working out to be $121-$122 a ton, while Indian wheat was offered at about $118 a ton. Chinese wheat, which used to come in at about $116 a ton, has dried up in recent weeks.

India, despite facing one of its worst droughts in the past decade, has said its wheat exports will not be affected since it has huge stocks of grains.

“But the situation is slowly changing,” said one trader. “We might have a shortage of wheat in this region, with the weather situation worsening. Look what is happening to the Australian crop. If this remains, there might be a supply squeeze and that would help Pakistan to pour out some more wheat at a good price.”

Another trader said: “What we are going to see is a rush for small shipments in this region. Apart from India, Pakistan is also well-placed to meet that kind of requirement.”

On Thursday, the Australian Bureau of Agricultural and Resource Economics slashed its forecast for the 2002/03 wheat crop to 17.1 million tons from a June forecast of 20.5 million tons, as severe drought gripped Australian farmland. Australia produced 24 million tons wheat in 2001/2002.

State-run grain trading agency Trading Corporation of Pakistan said on Monday it had issued a tender to sell 100,000 tons of wheat from government-owned stocks. The bidding deadline is August 8 and bids would be opened on the same day.

Traders said there was more interest from suppliers to bid at this tender than there was in the past few ones.

“Suppliers strongly feel that Pakistan might not offer a lot of wheat after this tender. Maybe, they will come out with just one more tender. Therefore, buyers might rush to sign up for some cheap wheat,” said one trader.—Reuters