The Egyptian General Authority for Supply Commodities (GASC) recently conducted an international tender for the purchase of wheat, aiming to bolster its flour wheat reserves. However, contrary to expectations, the purchase prices escalated, resulting in relatively minor procurement volumes.
Tender Details
During the tender held on April 16, there was a notable decrease in the number of offers for Russian and Romanian wheat. Meanwhile, while the prices of Russian offers dipped, European prices witnessed an increase.
Offer Summary
- 10 batches of Russian wheat were offered at prices ranging from $230 to $235 per ton FOB.
- French wheat was presented in 4 batches, with prices varying from $236 to $247 per ton FOB.
- A single batch of Ukrainian wheat was offered at $218.9 per ton FOB.
- GASC eventually procured 120,000 tons of Ukrainian flour wheat from Louis Dreyfus, with delivery scheduled for May 20-30. The average purchase price stood at $255.98 per ton C&F.
Market Impact
The purchase price observed in the recent tender was notably higher compared to previous transactions. This development has led to concerns within the industry, especially amidst Egypt’s efforts to augment its wheat reserves.
Past Procurements
GASC’s previous procurements included batches of wheat from various origins, with prices fluctuating across tenders.
Local Procurement Strategy
Egypt has initiated the purchase of wheat from local farmers, aiming to acquire 3.5 million tons this year. Stringent regulations have been put in place to regulate the usage and transportation of locally procured wheat, ensuring compliance with supply department guidelines.
The recent tender outcomes reflect the evolving dynamics of the wheat market, prompting stakeholders to reassess their procurement strategies amidst changing price trends and market conditions. As Egypt navigates through its wheat procurement endeavors, close monitoring of market developments remains imperative for informed decision-making.