Egypt's Gasc buys first French wheat since January

Egypt's Gasc bought its first French wheat at tender in nearly eight months, as offers from Russia, which has started strongly on its 2014-15 export campaign, rose out of competitiveness.

Gasc, the grain authority for the world's top wheat importing country, bought 60,000 tonnes of French wheat, its first purchase since January from the European Union's top producer, whose export prospects this season have been clouded by rain damage to the quality of its harvest.

The purchase reflected a drop in the offer price to $240.40 a tonne, enough easily to undercut rival offers of Romanian and Russian supplies even allowing for the extra shipping cost to Egypt from France rather than from the Black Sea.

Indeed, the cheapest Russian offer was at $251.95 a tonne, from Noble, excluding freight.

All five cargos of French wheat offered were priced below $249 a tonne.

The last wheat Gasc bought from France, in January, was priced at $278 a tonne.

'Shore up confidence'

Indeed, Russian wheat prices have, contrary to those elsewhere, been on a strengthening trend, supported by a flying start to 2014-15 for exports, which hit a record 4.2m tonnes last month, according to analysis group SovEcon.

Gasc wheat purchase, September 3

60,000 tonnes French wheat, from Granit at $240.40 a tonne plus $17.50 a tonne freight

60,000 tonnes Romanian wheat, from Bunge at $247.24 a tonne plus $12.64 a tonne freight

Wheat with 12.5% protein for export from Russian deep water ports rose $1.50 a tonne to $247.50 a tonne last week, SovEcon said on Monday, with rival consultancy Ikar estimating the price up $1 at $244 a tonne.

"I think we might see a bit of an end to that trend of rising Russian prices," a European trader told, although acknowledging potential upward pressure on values from a rise in the rouble, should signs of accord hold between Kiev and Moscow over the Ukraine crisis.

Meanwhile, the French success might "shore up confidence a bit" in the country's supplies, after the concerns that rain damage had left little of the crop fit for export.

While there has been talk of French merchants mixing in foreign supplies to beef up the quality of their exports, Gasc rules specify that wheat it imports should be shipped from the country of origin.

Romanian purchase

Gasc also purchased 60,000 tonnes of wheat from Romania, a leading supplier to Egypt, but where harvest time rains have also raised concerns over the availability of quality supplies.

Only one cargo of Romanian wheat was offered this time.

However, there were no cargoes offered of Ukrainian wheat, which has indeed not been tendered to Gasc since July.

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