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IKAR in Mass Media

Egypt wheat order highlights wheat price recovery

27 октября 2014 года

A wheat order by Egypt’s Gasc authority highlighted the revival in values, with the price paid returning above $250 a tonne, including shipping, reflecting more expensive offers from a range of origins.

Gasc, the grain authority for the top wheat-importing country, at its third tender this month, ordered 180,000 tonnes of the grain – 60,000 tonnes apiece from France, Romania and Russia.

The order took nearly to 1.9m tonnes Gasc’s purchases so far during 2013-14, which started in July, at a cost of more than $480m. However, the latest order also highlighted that the recovery in wheat values evident in futures markets – where prices in Chicago have risen by more than 9% so far in October in Chicago, the world benchmark – has been reflected in cash markets too.

Gasc paid, including freight, an average of about $255 a tonne, up 4% from the price at its previous tender, on October 10, and the highest since an early-September order.

Soufflet orders

French wheat remained the cheapest on offer – excluding freight – with Soufflet winning Gasc business with an offer of $234.44 a tonne, and Glencore and Invivo also tendering below the $246 a tonne which represented the cheapest cargo from a rival origin, Russia.

French merchants are seen as keen to promote exports, after low shipment volumes were blamed by Senalia and Socomac – which take wheat for delivery against Paris futures – for a rise in stored volumes which has prompted them to close to fresh receivals.

The drop in French soft wheat exports, which to destinations outside the European Union were 17% down in the first two months of 2014-15, reflects an unusually poor-quality crop, thanks to harvest-time rains.

Egypt is seen as a key market for France, with Gasc’s specifications not as stringent as those from some other large North African import markets across the Mediterranean.

Soufflet, which operates the Socomac grain terminal, at the port of Rouen, has now won business at four of the last five Gasc tenders.

Rouble trouble

However, cheap fresh rates won Romanian and Russian wheat Gasc business too, despite higher ex-transport prices.

Wheat from Romania, Gasc’s favoured origin last season, has been poorly offered in recent tenders, with the country too suffering harvest-time rains which damaged grain quality, encouraging sprouting and forcing downgrades to feed.

Russian prices, meanwhile, are being supported by a reluctance by farmers to sell at a time of a depreciating rouble.

Wheat represents a dollar-denominated hedge against the currency, which has set a series of record lows against the dollar, rising above 41 roubles to $1.

“Everyone prefers to stick with the commodity rather than sell,” Dmitry Rylko, head of Moscow-based consultancy Ikar said in a report on Monday reporting a $3 rise to $237 a tonne last week in the price of Russian wheat with 12.5% protein in Black Sea ports.

Source: Agrimoney.com  |  #grain   |  Comments: 0   Views: 93

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