GASC has pulled off its first successful wheat tender since Russia invaded Ukraine — but it didn’t come cheap. The General Authority for Supply Commodities (GASC), Egypt’s state grain buyer, bought 350k tons of wheat from France, Russia, and Bulgaria in its first successful tender since war broke out in Europe’s breadbasket, Bloomberg reports. The average price (accounting for freight) stood at nearly USD 490 per ton — the highest in nearly six years, and up by around half what GASC paid in its last international purchase in mid-February, says the business newswire.

We knew that wheat purchases would be pricier — but not this pricey: The government in early March said rising wheat prices would cost it an additional EGP 15 bn this fiscal year, penciling the cost in at USD 350 per ton. Paris wheat futures rose to close near an all-time high of USD 445 per ton yesterday.

GASC tried a different tack to secure supply: This was GASC’s first limited tender in years, with offers only open to European nations among the 16 countries accredited to supply the state. Six European companies made offers, Bloomberg says citing unnamed traders — around half the number GASC is accustomed to receiving in normal circumstances.

France made good on its pledge to “stand by Egypt” on wheat and make sure we get what we need, leading the purchases. GASC also secured one shipment of Russian wheat — which is less surprising than you might think given that Russian supply to private and public buyers has continued uninterrupted (and even grown) since the war began. Bulgaria also sold us a single cargo.

Look for the grain to be shipped in late May or the first half of June.

The tender was a test of the wartime wheat market. GASC put tenders on hold in early March after being forced to cancel two in a row, as the war blocked Ukrainian exports and sent ins. and shipping costs skyrocketing, upending the global market. We typically source north of 80% of our wheat imports from Russia and Ukraine.

GASC is working on diversifying its options after reserves dipped, having recently held talks with India, Argentina, France and the United States on potential supply. We had about 2.6 months of wheat on hand as of last week, down from the four-month figure the government announced in early March.

The government remains focused on the local harvest: The government will spend around EGP 36 bn to purchase 6 mn tons of local wheat this year, roughly doubling its purchase budget from last year.

Meanwhile, Ukrainian wheat apparently remains blocked by the war: Ukrainian authorities have accused Russia of continuing to block one ship that had been loaded for wheat to Egypt from leaving a Russian-occupied port on the Black Sea, Al Monitor reported. Our imports of Ukrainian wheat plunged 42% y-o-y last month, to record 124.5k tonnes.

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IN OTHER COMMODITIES- Our soybean imports are set to rise for marketing year 2022-2023: Egypt’s soybean imports will rise 11% in the October 2022-September 2023 marketing year on the back of our increasing domestic crush capacity, the US Agriculture Department has said in a report (pdf). We’ll import around 4 mn metric tonnes (MMT) in the coming year, up from 3.6 MMT in MY 2021-2022, after the two companies responsible for soybean crushing in Egypt — Soyven and Alex Seeds Company — raised capacity by more than 6%.

Our consumption is also on the rise: Our forecasted soybean consumption for the upcoming marketing year is up 6.6% from the current year to sit at around 4.05 MMT. Local production will rise by more than a third to 34k MMT.

US-origin soybeans are leading our imports: Our US-origin soybean imports make up 72.2% of our imports, with the report citing a dramatic increase between MY2016-2017 and MY2020-21.

What do we need all these beans for? Soybeans form the basis of poultry feed, among several other uses.