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Thursday, 26 July 2018

Egypt makes its most expensive wheat purchase since 2015

Thank you, climate change — Egypt makes its most expensive wheat purchase since 2015: The General Authority for Supply Commodities (GASC) paid an average USD 235.65 per tonne in an international wheat tender which closed on Tuesday, traders told Bloomberg on Wednesday. This was the most expensive wheat purchase Egypt has made since February 2015, and comes amid a drought across Europe and the Black Sea region. "The major weather issues are actually in Europe and the Black Sea, and those are the major suppliers of wheat to Egypt," Michael McDougall, senior vice president at ED&F Man Capital Markets in New York, said. GASC bought 420,000 tonnes of wheat for delivery in 1-10 September. 240,000 tonnes came from Russia, while 120,000 tonnes were bought from Romania and 60,000 tonnes from Ukraine.

More pain ahead? Russian wheat production is expected to fall for the first time in six years, while crops in France, Germany and the Baltic countries are also expected to be smaller. Benchmark futures traded in the Chicago Mercantile Exchange surged 21% this year and Paris wheat for December delivery hit a record for the contract.

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