Trading house Gemcorp plans to export more Russian wheat in 2020/21

Grains trader Gemcorp Commodities Trading is planning to boost the volume of Russian wheat it supplies to its African clients in the new season on hopes that rains will help crops meet quality requirements.

UK-based Gemcorp, founded by former Goldman Sachs and VTB Capital executive Atanas Bostandjiev in 2013, agreed a new deal to supply 200,000 tonnes of wheat to drought- and locust-hit Ethiopia this week.

"If the product is available from Russia, we will ship from Russia in the new season as a priority, subject to market conditions," Jamie Afnaim, its managing director, told Reuters. The new 2020/21 marketing season starts on July 1.

Gemcorp agreed to supply 900,000 tonnes of wheat to Ethiopia a year ago, which it initially expected to source mainly from Russia.

However, the low proportion of 11.5% protein wheat in Russia's 2019 crop due to the impact of hot weather on grain quality meant it was unable to source enough to fulfil the requirements of the Ethiopian programme.

It eventually shipped the grain from Ukraine and Argentina instead.

"This season hopefully there will be more 11.5% protein from Russia, the weather looks good for now," Afnaim said. The new crop in the world's largest wheat exporter is due to be harvested in summer.

Gemcorp is also targeting further supply deals with major importer Egypt, from which it has so far won only one state contract, Afnaim said.

He said structured trade finance is an increasingly crucial part of Gemcorp's business as it looks to expand in Africa and the Middle East, after a drop in oil prices cuts importers' dollar holdings.

"The opportunity which exists in Africa and also in the Middle East is now very clear to us after the pilot year: the funding for agriculture imports is massively constrained there," Afnaim said.

Reuters