Egypt bought half a million tons of Russian wheat under a private agreement

Egypt’s state grain buyer has purchased about half a million tons of Russian wheat in a private deal, achieving lower prices than those offered at traditional tenders. Reuters writes about this, citing four traders.

The General Administration for the Supply of Commodities (GASC) bought about 480 thousand tons of Russian wheat from the trading firm Solaris on Friday at a price of about 270 $/t C&F, traders said.

Traders told Reuters that the price may be lower than the unofficial minimum price set by the Russian government to control domestic wheat prices.

Other Russian wheat suppliers submitted offers on Friday at $265/mt FOB, believing it to be the set minimum price, and at C&F prices that exceeded $270/mt.

Traders told Reuters that the minimum price is not legally binding, but that suppliers are expected to follow the instructions of the Russian Ministry of Agriculture. The market is unclear on the level of the Russian minimum price.

“Traders say there are different minimum prices for private and public sales, as well as different prices for sales in each month from September to December and discounts for lower grades of protein wheat,” the newspaper writes.

At last week’s tender, all Russian suppliers submitted bids at a minimum price set at $270/t FOB, with C&F prices ranging from $286.25 to $291/t.

Then traders told Reuters that this affected the competitiveness of Russian wheat, and GASC instead bought cheaper Romanian and French wheat.

On Friday, GASC also privately bought one cargo of Bulgarian wheat for $270/t C&F.

Also, the Egyptian government recently signed a $500 mln loan agreement with the Abu Dhabi Export Office (ADEX) to buy imported wheat from the UAE-based Al Dahra agribusiness.

As reported earlier, in early August, Egypt purchased 235 thsd tonnes of Russian milling wheat at a tender for delivery in September-October.

Tags: wheat, Egypt, tender