Egypt makes biggest wheat purchase of the season
Egypt made its largest grain purchase this season – making up for lost time, after the disruptions to its import programme caused by uncertainties over quarantine rules.
Gasc, the state grain buyer for the world’s top wheat importer, bought 300,000 tonnes of wheat in an open tender.
Sellers slashed wheat offers to the lowest levels seen in 2015-16, but participation was still low by historical standards.
Priced to move
Gasc wheat purchases at tender February 25
60,000 tonnes of French wheat from Soufflet at $175.00 a tonne plus $8.98 a tonne freight
60,000 tonnes of Romanian wheat from Ameropa at $179.65 a tonne plus $4.33 a tonne freight
A further 60,000 tonnes of Romanian wheat from Ameropa at $179.65 a tonne plus $4.33 a tonne freight
60,000 tonnes of Ukrainian wheat from Louis Dreyfus at $179.00 a tonne plus $8.70 a tonne freight
Gasc paid an average of $177.06 a tonne, excluding freight, for the wheat bought on Thursday – $9.49 a tonne less than in paid at its previous tender, held on February 19.
Including freight, Gasc paid $185.47 a tonne, the lowest seen this season.
Soufflet offered French wheat for $175 a tonne, excluding freight, slashing $8.50 a tonne from its previous bid.
And Ameropa offered Romanian wheat at $179.65, cutting $6.90 from a bid made in an earlier tender in February.
Still, only six companies participated in the tender, indicating that some sellers are still reluctant to face the risks of shipping to Egypt.
Ergot fears
Behind this seller reluctance lies the fear of rejected cargoes.
A number of shipments to Egypt have been rejected in recent months, due to the presence of ergot, a fungus that can be toxic to humans.
The rejected cargos had ergot levels which fell within allowable levels set by Gasc in its tender contracts, leading to fears that the country’s agriculture ministry was pursuing a zero tolerance policy on ergot.
Slow sales
Egypt has ground to catch up after months of slow sales, which saw a number of tenders pulled due to the very high prices demand by cagey sellers.
According to the Egyptian Ministry of Supply, wheat reserves will last until June of this year.
On Thursday Egypt’s Central Agency for Public Mobilization and Statistics reported that wheat reserves were down 38.7% year-on-year at the end of 2014-15, at 800,000 tonnes.
Meanwhile, Tunisia received offers for durum wheat in a state tender, with prices down to $269.00 including freight.
And Saudi Arabia announced its first international tender for wheat this year, for 770,000 tonnes of hard wheat.
This week Saudi Arabia announced that it had 1.8m tonnes of wheat in reserve, up from 1.6m tonnes this time last year, and enough to meet demand for more than six months.
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