December 30, 2003

Egypt Pays $155-$157.50/MT For Syrian Wheat

Egypt's main state wheat buyer, the General Authority for Supply Commodities (GASC) said Monday it had paid $155-$157.50 per metric ton for 200,000 metric tons of Syrian soft wheat for late November to early 2004 delivery on a free on board basis.

Nomani Nomani, GASC's general manager, told OsterDowJones GASC paid $157.50/ton for 25,000 tons of the Syrian wheat that was sent immediately at the time of the deal in mid-November and $155/ton for the remaining 175,000 tons that will arrive early next year. He was not able to give a more precise shipment period.

Nomani said a $75 million loan made by the Saudi-based Islamic Development Bank to GASC earlier this year would finance the Syrian wheat purchase made in November as well as a subsequent deal last week for another 200,000 tons of Syrian wheat for first quarter delivery.

Nomani said final prices and delivery dates for the second 200,000-ton batch of Syrian wheat had not yet been agreed on.

Depending on quantities of wheat Syria has to export, Nomani said GASC may continue to buy more Syrian wheat in cash in 2004 outside its regular tenders and on top of the barter deal for commodities that the two countries announced in November.

"If they have the wheat, then why not?," he said.

Egypt signed a protocol with Syria's state-run General Establishment for Cereal Processing and Trade, or Hoboob, in November to import about 500,000 tons of wheat annually for a period of two years in exchange for cement and rice.

Syria had been listed in GASC tenders this year as one of the potential origins. But that stopped once the barter deal with Syria was struck in November and no Syrian wheat was ever purchased through a tender.

The International Grains Council in its latest report pegged Syria's exportable surplus for 2003-04 at 500,000 tons. However, the U.S. Department of Agricultural put Syria's forecast wheat stock this year at 4.5 million tons, with some 800,000 tons for possible export.

Egypt is forecast to import 6.5 million tons of wheat during the 2003-04 marketing year, according to the latest report from the International Grains Council. GASC purchases account for the bulk of Egypt's imports.