Egypt buys no Russian wheat tender as prices keep rising

Egypt bought no Russian wheat in an import tender for the first time in six months, in a sign of rising prices in Russia after a blistering start to its export season.

Egypt’s the General Authority for Supply Commodities (GASC), said it bought 120,000 tonnes of wheat in its latest tender, including 60,000 tonnes of Ukrainian wheat and 60,000 tonnes of Romanian wheat.

Traders gave the following breakdown of the prices paid by GASC in dollars per tonne:

• Louis Dreyfus: 60,000 tonnes of Ukrainian wheat at $246.40 and $17.30 freight equating to $263.70

• CHS: 60,000 tonnes of Romanian wheat at $248.75 and $15.35 freight equating to $264.10

These matched the two cheapest offers made during the tender.

The prices showed a sharp increase compared with the previous GASC tender last week and marked the most the agency had paid for the best offer in almost four years.

Russia has dominated Egypt’s tender purchased so far in the 2018/19 that started in July. But the cheapest offer of Russian wheat on Thursday at $249.95, excluding freight, was almost $8 a tonne more expensive than the best Russian price booked by GASC in its previous tender.

Wheat markets are awaiting the outcome of a meeting on Friday between the Russian government and grain exporters, amid recurring speculation that the world’s biggest wheat supplier could introduce some kind of curbs on shipments.

“The increased prices and reduced number of offers for Russian wheat in the tender reflect uncertainty regarding the introduction or not of export restrictions, rising Russian domestic prices, and potential logistical problems for the winter period,” a European export trader said.

Thursday’s GASC tender sought wheat for a Feb. 11-20 shipping period.

The tender drew an offer of U.S. wheat, while French wheat continued to be absent.

Although U.S. and French wheat were becoming more competitive against Black Sea origins, perceived risks in the Egyptian market, illustrated by recent confusion over GASC’s payment guarantees, were leading some exporters to be cautious about bidding, traders said.

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