In anticipation of further price reductions, the Egyptian GASC purchased only two batches of European wheat

On March 20, the state-owned Egyptian operator GASC held an international tender for the purchase of flour wheat with delivery on May 5-15, at which prices almost did not decrease, and the volume of purchases turned out to be insignificant.

It will be recalled that on March 7, GASC canceled the tender, although the prices of the proposals submitted for it were significantly lower than at previous tenders. At yesterday's tender, the prices of deferred payment offers fell further, while the prices of European wheat with 180 days payment even increased, so GASC bought only 2 lots of grain.

The following proposals were submitted to the tender on March 20:

• 22 (14 at previous auctions) lots of Russian wheat at a price of $235 (235)/t FOB with payment in 180 days and $240 (260)/t FOB with payment in 270 days,
• 5 (4) batches of French wheat at a price of $233-238.5 (226-230) $/t FOB with payment 180 days and $238-243 (231-243.5) $/t FOB with payment 270 days,
• 5 (6) batches of Romanian wheat at a price of $232.5-240 (232.5-236) $/t FOB with payment in 180 days and $240-245 (238-260) $/t FOB with payment in 270 days,
• 2 (2) batches of Bulgarian wheat at a price of $234.5-237.37 (225.77-240) $/t FOB with payment in 180 days and $240.5-245.37 (233.77-270) $/t FOB with payment of 270 days.

All Russian wheat offers were at the same price (as they have been for the past 6 months), but prices for offers with 270 days payment fell from $260 to $240/t FOB.

Ukrainian wheat again did not participate in the tender, and the cheapest offer was Romanian wheat with a price of $232.5/t FOB, which is $6.8/t higher than at the previous auction. At the same time, Romanian sellers reduced the price from the proposed $236.5 to $234.5/t FOB, and Bulgarian sellers - from $245.37 to $234.5/t FOB.

As a result, GASC purchased 110,000 tons of food wheat for delivery May 5-15 and payment 270 days after the opening of the letter of credit at an average price of $253.27/t C&F, which is $1.74/t lower than the February 15 auction, and exactly:

• 50 thousand tons of Bulgarian wheat from the Buildcom company at a price of $234.5/t FOB + $16.75/t freight = $251.25/t C&F,
• 60 thousand tons of Romanian wheat from NNC at a price of $234.5/t FOB + $20.78/t freight = $255.25/t C&F.

We will remind that GASC purchased the following batches of food wheat at previous tenders:

• February 15 – 120 thousand Ukrainian wheat at a price of $218.1/t FOB + $36.9/t freight = $255/t C&F and 60 thousand tons of Romanian wheat at a price of $237.4/t FOB + $17.6 /t freight = $255/t C&F with payment 270 days after the opening of the letter of credit,
• January 17 – 360,000 tons of wheat for delivery on March 15-30 at an average price of $285.48/t C&F,
• January 9 – 420,000 tons of mostly Russian wheat for delivery February 29-March 11 at an average price of $285.05/t C&F and payment 270 days after the opening of the letter of credit,
• December 19 – 480,000 tons of Russian wheat for delivery in February at a price of $265/t FOB + $22.4/t freight = $287.4/t C&F and payment in 270 days,
• December 5 – 180,000 tons of wheat at a price of $275.17/ton C&F.

The wheat market remains under the pressure of a significant supply, so the increase in the price of European wheat will be limited by the fall in the price of Russian wheat, which is being actively sold in anticipation of a new big harvest.