May 31, 2010
Russia has won a clean sweep in the first wheat tender by Egypt for nearly two months, narrowly undercutting French grain, which many traders had expected to gain a showing.
Russia had beaten France to all 180,000 tonnes of wheat purchased by Egypt, the world's biggest wheat buyer, in its first tender since the start of April.
Merchants Cargill, Nidera and Valars offered Russian wheat at US$178.50 a tonne, marginally below the US$179 a tonne that Invivo offered French grain at.
Furthermore, Invivo's 60,000-tonne offer was split between two loading ports, while shipping costs from France are, at best, 10% more expensive than those from Russia's Black Sea ports.
Egypt had missed out on the recent low in French wheat prices, which - thanks to the tumbling euro - fellow below US$170 a tonne earlier this month, Andrey Sizov, the managing director of Moscow-based analysis group SovEcon, said.
He attributed the lag in Egypt's wheat tenders, which were running at one a fortnight for much of 2009-10, to the imminence of the country own wheat harvest.
The tender might boost grain prices in regions around Russia's deep sea ports as merchants strove to win enough wheat to meet Egypt's late-June shipping deadline.
Acquiring wheat had proved difficult earlier in the season, as farmers sat on stocks, or offered insect-damaged crop.
Last year, the two countries clashed over deliveries of wheat which failed Egyptian quality standards, and prompted an overhaul of its wheat import regime.