Egypt's GASC bought mostly Russian wheat at a tender 8% more expensive than at previous auctions
The state-owned Egyptian operator GASC purchased 360,000 t of wheat for September 1-10 delivery at an August 2 tender at an average price of $263.68/t C&F, which is 8% higher than the purchase price of the June 6 tender, where GASC purchased the lot (the cheapest of those offered) 55 thousand tons of Russian wheat from Agric SA at a price of $244.5/t C&F ($229/t FOB + freight $15.5/t).
The number of bids submitted to the tender increased sharply from 18 to 30, as did the offer prices, which increased from $254-262 to $252-283/t FOB. The following proposals took part in the bidding:
- from the Russian Federation – 20 (13 at previous auctions) at a price of $250/t, and two bids at $256/t and $260/t FOB,
- from Romania – 5 (3) lots at the price of $252, $256, $267, $278.5, $283/t FOB,
- from France – 3 (2) at a price of $270, $274, $277.82/t FOB,
- from Ukraine – 1 batch at a price of $269/t FOB,
- from Bulgaria – 1 lot at a price of $278.5/t FOB.
As a result, GASC acquired:
- 120,000 tons of Russian wheat from the ASTON company at a price of $264/t C&F ($250/t FOB + freight $14/t),
- 120,000 tons of Russian wheat from the Grain Flower company at a price of $264/t C&F ($250/t FOB + $14/t freight),
- 60 thousand tons of Russian wheat from the international trader Olam at a price of $264/t C&F ($250/t FOB + freight $14/t),
- 60 thousand tons of Romanian wheat from the international trader Viterra at a price of $262.05/t C&F ($249/t FOB + freight $13.05/t).
All Russian wheat was offered at a tacit minimum selling price of $250/t FOB and was significantly cheaper than competitors. In addition, freight rates fell to $14/t compared to $15.5/t in the previous auction and $20/t three months ago.
The Russian Federation continues to dominate the world wheat market, but it will continue to increase world wheat prices by blocking exports from Ukraine and setting minimum prices for Russian companies against the background of the absence of international traders in the Russian market. Agric SA, which won the tender on June 6, offering Russian wheat cheaper than the then-established minimum price of $240/t FOB, did not participate in the latest auctions.
