Egypt buys approx 500k tons of Russian wheat in private deal – Reuters

Egypt’s state grains buyer GASC has bought around a half a million metric tons of Russian wheat in a private deal, four traders told Reuters on Monday.

This came after succeeding in negotiating lower prices than those offered in the more traditional tenders, the traders added.

Last year, Egypt, one of the world’s biggest importers of wheat, started shifting towards direct purchases instead of tenders after the Russian war in Ukraine caused disruption to its buying.

The General Authority for Supply Commodities or GASC bought around 480,000 metric tons of Russian wheat from trading firm Solaris on Friday, at a price of about $270 per ton on a cost and freight basis (C&F), the traders further told Reuters.

Traders have also said that the price could possibly be below an unofficial floor set by the Russian government to control domestic wheat prices.

Other Russian wheat suppliers submitted their offers on Friday at a free-on-board price of $265 per metric ton, believing it to be the set price floor, and a C&F price that surpassed $270 per ton, Reuters reported.

Traders informed Reuters the price floor was not legally binding. However, the suppliers were expected to follow instructions from Russia’s agriculture ministry.

There is a lack of clarity in the market about the level of the Russian minimum floor price, the traders added.

Reuters also quoted traders as saying that there are different minimum prices for private sales and sales in public tenders, as well as different prices for sales in each month between September and December and discounts for lower protein wheat grades.

In a tender last week, all Russian suppliers had offered their bids at a price floor set at $270 per metric ton on a FOB basis, with C&F prices ranging between $286.25 and $291 per metric ton.

Traders told Reuters at the time that this had weighed on Russian wheat’s competitiveness, with GASC purchasing cheaper wheat from Romania and France instead.

GASC had also privately purchased one cargo of Bulgarian wheat at $270 per ton C&F on Friday, traders told Reuters.

Last year, Egypt’s supply minister said buying directly from suppliers enabled the country to negotiate for better prices at times of uncertainty. The Egyptian government had recently signed a $500 million loan agreement with the Abu Dhabi Exports Office (ADEX) to purchased imported wheat from UAE-based agribusiness Al Dahra.