A drought across the Europe and the Black Sea region will force Egypt to pay a higher price for new wheat imports, Gianlucca De Paoli writes for Bloomberg. The General Authority for Supply Commodities (GASC) purchased yesterday 420k tonnes of Russian, Ukrainian, and Romanian wheat, according to Reuters’ Arabic service. The lowest price presented at yesterday’s tender was USD 217.95 per tonne from Russia’s GTCS — USD 14 higher per tonne than what GASC paid for its last shipment at USD 234.26 a tonne including freight, Bloomberg says. “Egypt paid an average USD 220.25 a tonne for 175k tonnes of Russian wheat in the last tender on July 10,” according to the business information service, which claims that the second-lowest offer of USD 235.66 per tonne came from Daewoo.

Traders do see an opportunity to flex, but acknowledge that it could be a short term problem for the time being. “Egypt will have to pay more," BGC Partners’ Pierre Tronc said before the offers were presented. "It is just a question of price. I don’t see supply being a problem." He added that “Russia will probably continue to dominate Egypt’s wheat tenders.”