Amid the war in Iran, Algeria purchased 200,000 tons of wheat at a tender for $30/ton more than two weeks ago

Algerian state-owned company OAIS purchased 200,000 tons of milling wheat of any origin in a tender, Reuters reports.

The purchased wheat will likely be of Black Sea origin and should be delivered to the ports of Mostaganem and Tenes during the periods of April 1-15, April 16-30, May 1-15, May 16-31, June 1-15, June 16-30. Deliveries from South America or Australia should be made a month earlier.

The purchase price is not reported, but according to traders, it is $291/t C&F, which significantly exceeds the purchase price in February due to the increase in the cost of grain and freight against the backdrop of the war in Iran.

Recall that on February 24, OAIC purchased about 600 thousand tons of milling wheat of European or Black Sea origin for delivery in April-May at a price of $259-260/ton C&F.

Such a sharp increase in wheat prices is due to the war in Iran, which led to an increase in oil prices by 25-30% and a further increase in prices for grain and oilseed crops.

During the month , exchange prices for wheat increased by 10-12% , but prices in the physical market are growing more slowly, since most of the increase is due to higher freight and cargo insurance. Offer prices for Russian wheat with 12.5% protein rose to the highest level in the season of $ 239-240/t FOB, while demand prices for Ukrainian food wheat with delivery to the port rose by only $ 1-2/t to $ 216-220/t, which is inferior to the maximum reached at the beginning of the season ($ 222-228/t). This is due to low demand from buyers who are postponing purchases in anticipation of the end of the war and a decrease in prices against the background of a fairly large supply this season.

Thus, the Jordanian Ministry of Industry and Trade, without explaining the reasons, canceled the tender scheduled for March 10 for the purchase of 120 thousand tons of milling wheat, but immediately announced a new international tender for the purchase of another 120 thousand tons of wheat.