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Russian wheat offered at lowest price in Egypt's GASC tender

Reuters , Tuesday 14 Apr 2020
wheat
A combine harvests wheat in a field in Krasnoyarsk region, Russia September 7, 2018. REUTERS
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Russian wheat was offered at the lowest price in an Egyptian international purchase tender, as the world’s largest buyer of the grain looks to bolster strategic reserves amid concerns about supplies due to coronavirus lockdowns.

In a rare move requested by President Abdel Fattah al-Sisi, Egypt is planning to import 800,000 tonnes of wheat during its own local harvest season.

Egypt’s state buyer, the General Authority for Supply Commodities (GASC) is seeking an unspecified quantity of wheat for two shipment periods from May 15-25 and May 26-June 5 on a free-on-board (FOB) basis.

Traders told Reuters last week that GASC considered seeking offers on a cost and freight (C&F) basis and paying for its purchases at sight, but on Monday it said it was seeking wheat on a FOB basis with freight offered separately.

The lowest offer presented on Tuesday was $239.95 for 60,000 tonnes of Russian wheat, traders said, adding that participation was relatively weak due to concerns over potential export bans and port closures, as well as tight supplies of older wheat.

“Five offers per shipment period is very small, normally it would be double that,” one Cairo-based trader said.

Romania, a key origin for GASC, has issued a surprise ban on cereal exports to non-European Union destinations during a state of emergency until mid-May.

“There is not much 11.5% or 12% protein left in big volumes of 60,000 tonnes in Russia and Ukraine while Romania is for the time being out of the game,” one European trader said.

Supply Minister Ali Moselhy said Egypt expected to get 4.5 months’ worth of wheat from the local harvest, which begins mid-April, lifting its strategic reserves to 7-8 months.

The country of 100 million people has not witnessed the panic-buying seen in some European states as the new coronavirus pandemic spread.

But officials have sought to reassure citizens that the country is well-stocked in the build-up to the holy month of Ramadan, which starts in late April and normally sees an increase in consumption.

Millions of citizens depend on the government’s subsidy programme for access to discounted staples such as bread, pasta and cooking oil.

Traders gave the following breakdown of the offers received in dollars per tonne on a FOB basis for the May 15-25 shipment period:

* Agro AST: 60,000 tonnes of Russian wheat at $239.95

* Casillo: 60,000 tonnes of French wheat at $247.69

* Gemcorp: 55,000 tonnes of Russian wheat at $247.80

* Glencore: 60,000 tonnes of French wheat at $247.86

* Ameropa: 55,000 tonnes of U.S. hard read wheat at $245.00

Traders also gave the following breakdown of the offers received in dollars per tonne on a FOB basis for the May 26-June 5 shipment period:

* Grain Export: 60,000 tonnes of Russian wheat at $243.00

* Glencore: 60,000 tonnes of French wheat at $247.86

* Hakan: 60,000 tonnes of French wheat at $249.75

* Casillo: 60,000 tonnes of French wheat at $247.69

No purchase has yet been made and results are expected later on Tuesday.

Traders said the following were the best offers presented including cost and freight (C&F):

May 15 - May 25:

* Agro AST: 60,000 tonnes of Russian wheat at $239.95 and $9.50 freight equating to $249.45

* Gemcorp : 55,000 tonnes of Russian wheat at $247.80 and $10.35 freight equating to $258.15

* Glencore: 60,000 tonnes of French wheat at $247.86 and $11.85 freight equating to $259.71

* Casillo : 60,000 tonnes of French wheat at $247.69 and $14.60 freight equating to $262.29

* Ameropa: 55,000 tonnes of U.S. hard read wheat at $245.00 and $24.10 freight equating to $269.10 May 26 - June 5:

* Grain Export: 60,000 tonnes of Russian wheat at $243.00 and $9.50 freight equating to $252.50

* Glencore: 60,000 tonnes of French wheat at $247.86 and $11.85 freight equating to $259.71

* Hakan: 60,000 tonnes of French wheat at $249.75 and $11.85 freight equating to $261.60

* Casillo : 60,000 tonnes of French wheat at $247.69 and $14.60 freight equating to $262.29

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