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Wednesday, 3 June 2020

Egypt purchases 120k tonnes of Ukranian wheat in third int’l tender of local harvest season

GASC purchases 120k tonnes of Ukranian wheat in third int’l tender of local harvest season: State grain buyer GASC, the world’s largest grain buyer, has purchased 120k tonnes of wheat from Ukraine in its third global wheat tender during the 2020-21 local harvest season, including 60k tonnes at USD 210 per tonne — the lowest price offered, according to Reuters. The tender, which was issued on Monday, requested shipment between July 10-25, but the wheat may not be available until August, sources told S&P Global.

Black Sea harvest delays: Ukraine would likely struggle to meet the tender’s shipment period as the 2020-21 harvest season in the Black Sea region, from which Egypt imports most of its wheat, got off to a late start this year following a spat of dry weather, the reports said. The US Department of Agriculture has forecast a decline in Ukraine wheat production for the season, and European crop monitor MARS has done the same for Romainian production, while Russian output volumes have proven hard to predict, S&P Global notes. Monday’s tender saw Russia’s largest grain trader RIF also offering 55k tonnes of Russian wheat at USD 220 in its first participation in a GASC wheat tender, among over a dozen other offers.

Why is this big news? It’s all about ensuring we have a secure food supply in case covid-19 disrupts the global supply chain: Egypt is looking to import 800k tonnes of wheat, while expecting to harvest 3.6 mn tonnes locally to secure its reserves of basic commodities amid the global pandemic. Together they would give the country enough of the grain to cover 7-8 months of consumption. Earlier in the pandemic, major exporters Russia and Romania imposed export bans to secure their own supplies, but the latter lifted its ban under pressure from the European Commission. Russia expects to follow suit next month.

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