European wheat wins the tender in Egypt due to a significant reduction in prices

Egyptian state-owned operator GASC on August 22 held a new tender for the purchase of wheat, which was submitted significantly more proposals, and prices for European wheat were lower than for Russian.

Compared to the August 8 tender, the number of bids increased from 18 to 32, especially for Bulgarian and French wheat, while the bid prices decreased from 262-305 USD/t FOB to 265-270 USD/t FOB.

The following bids were submitted for the tender:

• from Russia – 15 (14 at the previous auction) lots at 270 $/t FOB (262-275 $/t two weeks ago and 250 $/t three weeks ago) and 1 lot at 280 $/t FOB (295 and 305 $/t),
• from Romania – 5 (2) consignments at 265-272 (269 and 275) $/t FOB and one cheapest at 256 $/t FOB,
• from Ukraine – 2 (2) shipments at the price of 269.8 (278.4 and 284.1) $/t FOB,
• from Bulgaria – 4 (0) lots at the price of 263.7-271 $/t FOB,
• from France – 6 (0) lots at the price of 266.82-272.82 $/t FOB.

It is worth noting the increase in supply and low prices for Bulgarian and French wheat, which did not participate in the previous tender, as well as the fact that Russian wheat was offered exclusively at $270/t FOB, while prices for European grain were much lower.

As a result, GASC purchased only one batch (60 thsd tonnes) of the cheapest Romanian wheat from Agro Chirnogi for delivery on October 5-20 and immediate payment at 256 $/t FOB + 14.25 $/t freight = 270.25 $/t C&F, which is 3% lower than the purchase price of Russian wheat at the tender on August 8, which was 278.5 C&F (262 $/t FOB + 15.74 $/t freight) with payment within 180 days.

In the new season, GASC purchased 655 thousand tons of wheat, of which 81.7% was Russian, so European exporters increased the volume of proposals to compete with Russia in the market of the largest importer of wheat.

Tags: wheat, Russia, Bulgaria, Egypt, tender, Romania, EU, prices, France