The price of this item is discounted to a level significantly below international standards.
Reuters recently reported that Egypt bought about half a million tons of Russian wheat in a private deal and succeeded in negotiating a lower price than the price offered in traditional tenders.
As one of the world’s largest wheat importers, Egypt last year began switching to direct purchases instead of bidding as before after the conflict between Russia and Ukraine disrupted purchases. products from this country.
The Egyptian General Department of Supply Goods (GASC) bought about 480,000 tonnes of Russian wheat from the trading company Solaris on September 1, at a price of about $270 per tonne on a cost basis, traders said. and freight (C&F). Notably in last week’s auction, all Russian suppliers submitted bids at C&F prices ranging from $286.25 to $291/ton.
Traders added that prices may be below the floor due to the Russian government’s efforts to control domestic wheat prices. Other Russian wheat suppliers made an offer on September 1 with a free delivery price of $265/ton.
There will also be large spreads for private trading and public auctions, as well as different sales prices for each month of the fourth quarter and discounts for high-protein wheat varieties. lower.
According to the businessmen, this has affected the competitiveness of Russian wheat, as GASC buys cheaper Romanian and French wheat. GASC also purchased a single batch of Bulgarian wheat for $270/ton C&F on the same day.
A wheat field in Russia. Photo: Reuters
After the conflict between Russia and Ukraine disrupted the country’s wheat exports, Egypt relied heavily on relatively cheap Russian grain. Last year, Egypt’s supply minister said buying directly from suppliers allows the country to negotiate better prices at times when prices can fluctuate sharply.
The North African country is suffering from a foreign currency crisis after the conflict in Ukraine caused a major shock to the economy, causing the country to begin delaying payments for wheat shipments. The government recently signed a $500 million loan agreement with the Abu Dhabi Export Office (ADEX) to purchase imported wheat from UAE-based agribusiness Al Dahra.
Russia will maintain its position as a net exporter of agricultural products in 2022 when wheat exports bring in more than 41.6 billion USD. One-fifth of the world’s current wheat exports are from Russia, accounting for 20%.
In addition to Egypt, Russian Minister of Agriculture Dmitry Patrushev also said that 87% of Russia’s food production will be sent to markets that do not support Western sanctions. Mr. Patrushev noted that the country’s total wheat production in 2023 was 78 million tons and that 93% of winter cereals weathered the cold weather in good conditions.
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