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Tuesday, 5 July 2022

GASC could purchase wheat directly from suppliers

Egypt is lining up its next wheat buy — this time sans tender? GASC is looking to purchase wheat directly from commodity traders outside the normal tender process, Reuters and Bloomberg reported yesterday, citing traders. The state grain buyer yesterday invited offers from the trading houses for an undisclosed amount of wheat for shipment in September and October, they said. The offers should be valid until today. GASC typically purchases wheat via international tenders but in May the cabinet gave the go-ahead for the authority to buy directly from suppliers.

The Fab Four: GASC is reportedly only interested in direct offers for wheat from Romania, Bulgaria, Russia and France. These are the same four countries from which we last week bought a massive 815k tons of wheat through a normal tender process. All four are emerging as important suppliers to Egypt, which has bought shipments exclusively from them in the three successful international tenders since Russia’s war in Ukraine upended the global grain markets in February. Russian and Ukrainian wheat had accounted for around 80% of our imports before the war broke out.

Prices have fallen significantly in recent weeks: Chicago futures are now trading at their lowest price since February, having fallen by a third since the middle of May, when prices rose to a 14-year high spurred by the conflict. GASC bought the wheat in its latest tender at around USD 430-440 per ton on a cost and freight (C&F) basis, with the cheapest prices coming from Romania and the most expensive from France.

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