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IKAR in Mass and Industry Media


Ideas of harvest delays price Russian wheat out of Egyptian tender

agrimoney.com, 26.06.17


Russian wheat missed out on business at a tender by Egypt's Gasc for only the second time in a year as the lift to prices from ideas of a late harvest more than offset the dent from rouble weakness.

Gasc, grain authority for the world's top wheat-importing country, bought 175,000 tonnes of wheat on Thursday at tender, taking the total it has purchased for 2017-18 for import above 1.0m tonnes already, before the season has even started.

Indeed, this was the fourth tender that Gasc has undertaken for delivery in 2017-18, which begins next month, in a period when it is typically out of the market, with stores boosted by purchases from the domestic harvest.

However, this time Gasc purchased all its wheat from Romania and Ukraine, spurning Russian supplies for only the second time in the more than 25 orders it has made at tender in the past year.

Russia undercut

The offers from these two countries - with Ukraine wheat tendered as low as $190.88 a tonne, excluding freight - undercut cargos from Russia, which broadly showed price increases from the previous Gasc event, last week.

Archer Daniels Midland offered Russian wheat at $198.85 a tonne excluding freight, up $2.00 a tonne on the June 13 tender, with Daewoo raising its prices by $3.05 a tonne to $196.75 a tonne, and Aston by nearly $10 a tonne, to $204.00 a tonne.

By contrast, Cerealcom cut its offer of Romanian wheat by some $3.50 to $193.94 a tonne to win a Gasc order.

French wheat also came into closer contention, with Casillo reducing its price by $1.00 a tonne to $196.69 a tonne, below most Russian offers, although the extra cost of shipping along the Mediterranean means more of a discount is needed for French wheat to win Gasc attention.

Harvest delays

The increase in Russian prices comes despite a 5% devaluation in the rouble against the dollar since the previous tender, which should in theory make the country's exports more competitive.

However, Russian values are facing upward pressure from ideas of a delayed harvest, limiting the supplies available to export so early in the season.

Ikar earlier this week, estimating at $4 a tonne the week-on-week rise in Russian wheat export prices at Black Sea ports, said that "agriculture producers in many central and southern regions estimate the delay in crop harvesting at 2-3 weeks".

A European grain trader told Agrimoney.com: "I do not think there is any doubt that ample Russian supplies will be there eventually.

"It is just whether they will be there for shipping so early, in the right place and of the right quality."

Local procurement

The June purchasing spree by Gasc follows an admission by the authority on Monday that its purchases of local crop had, at 3.4m tonnes, fallen marginally short of expectations, and well below the 5m tonnes acquired last year.

It also comes amid fresh concerns that the country may be poised to reintroduce a zero tolerance hurdle on traces of fungal contaminant ergot, a regime which last year saw the country's temporarily boycotted by merchants over the difficulty in meeting such a rule.

The 12 cargos that Gasc was offered this time, at prices in many cases lower than at the June 13 event, suggests that traders are pretty relaxed over the threat.

http://agrimoney.com/news/ideas-of-harvest-delays-price-russian-wheat-out-of-egyptian-tender--10826.html



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