Egyptian GASC bought Russian wheat at a tender 5.5% more expensive than a week ago
The Egyptian state operator GASC, a week after the last tender, held new wheat procurement auctions on August 8, where prices rose by 5.5% and Russian wheat won again. Analysts expected only an increase in freight costs, but FOB prices also jumped by 4.8%.
The number of submitted bids decreased from 30 to 18, but bid prices increased from $252-283 to $262-305/t FOB.
The following applications were submitted to the tender:
- from the Russian Federation – 14 (20 at previous auctions) lots at a price of $262-275 (250 a week ago) $/t FOB, and two bids at $295 (256) and $305 (260)/t FOB,
- from Romania – 2 (5) lots at a price of 269 and 275 (252, 256, 267, 278.5, 283) $/t FOB,
- from Ukraine – 2 (1) lots at a price of $278.4 and $284.1 (269)/t FOB.
Bulgarian and French wheat did not participate in the tender.
As a result, GASC purchased the cheapest 235 thousand tons of Russian wheat from Grain Flower (GTCS) with payment within 180 days at an average price of $278.5/t C&F ($262/t FOB + freight $15.74/t), which on 5.5% higher than the purchase price at the August 2 tender, where 360,000 t of wheat were purchased with payment immediately after delivery at a price of $263.68/t C&F ($250/t FOB + $13.84/t freight).
In general, the following wheat lots were contracted at the tender:
- 60 thousand t with delivery on September 15-30 at a price of $262/t FOB + freight $14.5/t = $276.5/t C&F,
- 60,000 t with delivery on September 15-30 at a price of $262/t FOB + freight $16.25/t = $278.25/t C&F,
- 55 thousand t with delivery on September 15-30 at a price of $262/t FOB + freight $17.69/t = $279.69/t C&F,
- 60,000 t for October 1-15 delivery at $262/t FOB + $14.5/t freight = $276.5/t C&F.
After Ukraine declared the ports of the Russian Federation as a zone of military risk, the cost of freight increased by 12.4%, and will continue to increase in the future, as many ship owners refused to enter Russian ports last week. Therefore, in the coming weeks, the Egyptian GASC will continue to actively buy wheat.
