Egypt made its biggest wheat purchase at tender in at least a decade as it joined the importers purchasing at prices among their lowest in three months, undermined by harvest pressure and economic worries.
Gasc, the grain authority for the world’s top wheat-importing country, bought 815,000 tonnes of the grain, its largest buy at tender on GrainPriceNews data going back to 2012-13.
The purchase – which brought to 1.28m tonnes of wheat that Gasc has ordered so far for delivery in 2022-23, the quickest start to a season for purchasing in at least a decade – came amid a rash of purchases by importers following a tumble in wheat prices.
Last week, Algeria bought 740,000 tonnes of wheat, while Jordan has purchased 60,000 tonnes before issuing a fresh tender, with Bangladesh, Pakistan and Taiwan also seeking offers.
The slew of demand follows a tumble in wheat prices from, in some cases, record highs, a retreat broadly attributed to the onset in earnest of the northern hemisphere harvest, bringing a rash of fresh supplies to market, besides selling encouraged by rising interest rates and weakened global economic hopes.
Gasc paid $435 a tonne, including freight, for its latest order, nearly 10% below the $480 a tonne at at its previous tender, four weeks ago, and indeed the cheapest price paid since February.
Chicago soft red winter wheat futures, the world benchmark, have, on a spot contract basis, tumbled by 29% from their mid-May high.
Paris soft wheat futures have dipped by nearly 20% in the same period.
Indeed, French wheat accounted for 350,000 tonnes of Gasc’s purchase, with 240,000 tonnes sourced from Romania, 175,000 tonnes from Russia and 50,000 tonnes from Bulgaria.
Battle of the origins
This represents an atypically large purchase of French origin so early in the season, a period in which Gasc typically purchases from Black Sea suppliers, and in particular Russia.
However, the competitiveness of Russian exports is being undermined by a rouble standing near its strongest in seven years against the dollar, besides by the country’s export tax, with Ukraine shipments curtailed by war.
The extent of the orders from France “is unusual, especially at the beginning of the campaign”, Agritel said.
“This illustrates the competitiveness of French origin on the international scene, and the tensions that exist linked to the situation in the Black Sea basin.”