16:26 UK, 2nd September 2009, by Agrimoney.com
Egypt goes on wheat-buying spree

European wheat has worked its way back into Egypt's affections, as the world's top importer of the grain went on its biggest shopping spree for at least a year.

Egypt's state grain buying organisation, the General Authority for Supply Commodities, which revealed on Monday that it was in the market for wheat cargoes of 30,000-60,000 tonnes, has bought 330,000 tonnes of the grain.

The spree beat the 295,000 tonnes the GASC bought in one swoop six weeks ago and in August 2008, and is the biggest since at least July 2008, according to records kept by Reuters.

More than half of Tuesday's purchases – 180,000 tonnes – were of French grain tendered by Bunge, Glencore and Invivo at $175 a tonne, representing a $31.5m outlay.

'Rough' competition

These orders surprised many observers given, given the premium price of French grain.

"The competition should be rough against the very competitive Black Sea and American origins," Agritel, the French consultancy, said before the results were announced.

The GASC also bought 90,000 tonnes of Russian wheat from Cargill, Louis Dreyfus and Nidera at between $172 and $173.72 a tonne, and 60,000 tonnes of US soft red winter wheat from Toepfer at $168 a tonne.

Paris milling wheat for November stood E0.50 higher at E126.75 ($180.6) a tonne at 15:15 GMT. Chicago wheat for December was 2.5 cents lower at $4.84 ¾ a bushel ($178.12 a tonne).

Quality hurdles

Egypt, which earlier this year attracted controversy by rejecting two Russian grain shipments on quality grounds, earlier on Tuesday said it was raising the bar for US wheat.

The tightened conditions included protein content of at least 9.5%, compared with a previous hurdle of 9.0%, and cadmium and lead content of at most 0.2%.

Egypt requires that French wheat has at least 11% protein, and Russian wheat more than 11.5%.

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