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Platts, a leading global provider of energy and commodities information, today launched the first independent daily price assessment for Australian wheat exports. The new reference reflects the physical spot value of seaborne Australian Premium White (APW) wheat exported free on board (FOB) from Western Australia. It expands Platts' existing suite of price references for grains, which includes Black Sea and European wheat and corn assessments.
“The new reference, launched in response to industry demand, will serve as a neutral benchmark for Australian and Asian wheat markets,” said Andrew Goodwin, Platts vice president and general manager of agriculture, metals & petrochemicals. “Not only will it provide increased transparency to what is traditionally an opaque regional market, but it could prove a significant tool for flour milling economics management, expanded physical trading of wheat, and basis risk management.”
The assessment, Platts APW Wheat FOB Australia, will be assessed using actual spot transactions, bids and offers for Australian milling wheat, normalized to specific quality, volume, location and timing defined in Platts' structured methodology available at www.platts.com.
"With around 18 million metric tons of wheat exports per year, Australia is by far the largest supplier of wheat to Asia, making it a natural pricing reference point for the Asia Pacific (APAC) region," said Julien Hall, Platts senior managing editor, Asia agriculture. "A reliable local price reference for this market is being sought by Australian exporters and Asian and Middle-Eastern flour millers, which have historically relied on North American wheat futures contracts, which by virtue of the geographic and seasonal difference haven’t tended to reflect APAC-specific fundamentals."
Most Australian milling wheat, used primarily in the making of baking flour that goes into a variety of food products such as breads and noodles, has traditionally been sold by a dozen or so trading firms to flour millers across southeast and north Asia and the Middle East. The Platts price assessment process opens up the price discovery process to active market participants.
The spot physical price references published by Platts are often sought by exchanges for cash clearing and settlement purposes for futures and derivatives contracts. The methodology underpinning the Platts APW Wheat FOB Australia assessment gives it scope for such use regionally and globally when and if needed.
The Platts APW Wheat FOB Australia price assessments will be published in Platts Daily Grains and Platts Agriculture Alert.
For more information on grains, visit the Platts website.
