Malaysian demand for quality bread increases U.S. wheat exports

by Holly Demaree
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U.S wheat exports will increase to 200,000 tons, as demand for quality bread and bakery goods rise.
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WASHINGTON, D.C., U.S. — In 2015-16, the U.S exported 98,000 tons of corn valued at $25.8 million, up from 30,000 tons in 2014-15 as price of corn became competitive compared to previous years, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service said March 27 report. For wheat, the U.S. exported 189,000 tons of wheat valued at $44.2 million in 2015-16, down from 195,000 tons in 2014-15 due to depreciation of Malaysian currency. There was no U.S. rice exported to Malaysia.

For 2016-17 the total overall imports of corn into Malaysia will likely drop to 3.8 million tons. Even so, U.S. exports of corn are likely to increase to 150,000 tons, due to positive acceptance of U.S. corn among Malaysian feed millers. This is evident from the first bulk shipment of U.S corn to Malaysia on Aug. 8, 2016, after an absence of five years. A second bulk shipment arrived on March 13, 2017, with total tonnage of 68,100 tons of U.S. number 2 yellow corn. A third and fourth bulk shipment are bound for Malaysia in late March and April.

Malaysia’s overall wheat imports for 2016-17 will stay at 1.7 million tons. However, U.S wheat exports will increase to 200,000 tons, as demand for quality bread and bakery goods as living standards rose among Malaysian urbanites, according to the report. Due to price and long distance, there has been no U.S. rice exported to Malaysia for the last few years and this is not likely to change in the short term.

Demand for poultry, pork and bread stabilized after two years’ implementation of a 6% Goods and Services Tax (GST). Depreciation of Malaysian currency by as much as 30% in the last 18 months impacted importation of corn, wheat and rice as price of commodities became expensive, the report said. For 2016-17, demand for wheat and rice remained stagnant as prices rose due to depreciation of Malaysia currency, whereas demand for poultry improved as people switched from meat and seafood (mostly imported and expensive) to chicken. For 2017-18, corn imports are expected to grow moderately in line with population growth and stronger feed use for poultry.
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