Cheap Russian wheat dominates Egypt’s 655,000 T purchase -traders

Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), bought 655,000 tonnes of wheat in an international tender on Tuesday with cheap Russian wheat dominating the business, traders said on Wednesday.

The total is believed to involve an estimated 535,000 tonnes sourced from Russia and 120,000 tonnes from Romania.

“Large volumes of cheap Russian wheat continue to be offered in export markets to the pleasure of importers,” one European trader said. “Russia had a record harvest last summer and is expecting a decent crop this year so stocks have to be cleared out, while uncertainty about Ukraine’s grains export channel continues.”

GASC’s wheat was purchased at $260 and $250 a tonne on a free-on-board (FOB) basis, traders said in assessments on Wednesday. This was in line with price estimates on Tuesday night. GASC had announced the tonnage bought but gave no price details.

Last month, Reuters cited two sources as saying the government wanted exporters to ensure prices paid to farmers were enough to cover average production costs, which would mean keeping export prices for wheat at, or above $275 to $280. Reuters reported on Tuesday Russian FOB May export prices for 12.5% protein wheat at around $265 per tonne FOB.

Some traders told Reuters that they were cleared to offer prices as low as $260 per tonne.

“The technical details of the floor price are unclear, but in any case major export sales are being made below the $275 level, which to me shows the selling pressure for Russian wheat. I think Russian wheat and EU Black Sea supplies including from Romania will dominate Middle Eastern and North African export markets in coming months.”

GASC asked suppliers to submit FOB offers for two shipment periods, with payment to be made at sight (immediately) using funding from the International Islamic Trade Finance Corporation (ITFC).