Egyptian wheat purchases speed ahead of last season's pace

23.02.2017

Egypt made another huge wheat purchase, mainly from Russia - but it is paying more dearly for its Black Sea supplies, some of which is now being undercut by offers of French grain.

Gasc, the state grain buyer for top-ranked wheat importer Egypt, bought 360,000 tonnes of Russian and Ukrainian wheat.

The grain buyer has now bought 720,000 tonnes of wheat in five days, an unusually brisk pace of purchasing even for Gasc, bringing total purchases so far this season to 4.60m tonnes

This means the pace of wheat purchases, which got off to a slow start this year, are now running well ahead of last season.

This time last season, Gasc had bought 3.25m tonnes of wheat.

Prices rise

But the prices that Gasc is paying are on the rise, thanks to increasing prices in Russia.

The grain buyer paid between $196.50 and $199.30 a tonne for five 60,000 tonne cargoes of Russian wheat.

And a 60,000 tonne cargo of Ukrainian wheat was bought for 195.90 a tonne.

In comparison, just a week ago Gasc paid between $195.00 and $197.00 a tonne for Russian wheat.

Rouble makes Russian wheat less competitive

Russian prices have been rising thanks to the stronger rouble, as well as the strong export demand.

In fact, French wheat was offered at $199.00 a tonne, below the most expensive Russian wheat bought, although higher freight costs kept it out of the running.

French product has yet to win market share in a Gasc purchase this year.

This week Russian agriculture consultancy SovEcon cut its forecast for Russia's 2016-17 grain exports to 36.5m tonnes down 1.5m tonnes from its earlier estimate, with infrastructure group Rusagrotrans also lowering its forecast for shipments.

And the farmer's lobby Russian Grain Union warned that wheat profitability was under pressure due to the rising currency.


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