Details of offers to the Iraqi wheat tender highlight Russia's waning competitiveness in exports over other major exporter, with its advantage over Australian and Canadian supplies cut to about $10 a tonne or less.

The 150,000 tonnes of wheat that Iraq bought from Russia equate to a price, excluding freight costs of some $37 a tonne, to about $377 a tonne, according calculations from one leading observer seen by Agrimoney.com.

While retaining a healthy discount to the cheapest US wheat on offer, at more than $400 a tonne on the same terms, other origins were far closer competitors.

Australian wheat was offered at a little over $387 a tonne free on board, with Canadian supplies only $8 a tonne more expensive than Russian.

At the last Egyptian grain tender, last week, Canadian supplies were priced at a premium of more than $11 a tonne.

The wheat Iraq purchased, for November delivery, was significantly more expensive than the $320-350 a tonne free on board that Egypt's Gasc state grain buyer paid earlier for Russian supplies, for shipment in the same month.

'Already lost its grip'

The data come amid a growing industry debate about how long Russia, renowned as a supplier of competitively-priced wheat exports, can retain its stranglehold on regional trade, given drought-depleted supplies.

SovEcon, the Moscow-based consultancy, on Thursday said that Russia's gain exports would from next month "start to decline rapidly" from the 3.0m-3.1m tonnes expected this month, thanks to shrinking inventories, but declined to forecast an October number.

In the US, a trader at a major brokerage told Agrimoney.com that Russia has "probably already lost its grip".

For US prices, "the question is how much extra trade that we pick up. It looks like people are hoping that we will gain a lot of export businesses in non-traditional markets", such as North Africa and the Middle East, as Russia's supplies dwindle and its prices rise.

Logistical challenge 

Earlier, broker Benson Quinn Commodities said that the extent of Russia's early-season sales looked set to test the country's ports as well as its supplies.

Benson Quinn's Brian Henry said: "With this [Iraq] business, it appears the Russian have 16 total wheat vessels to load between now and the end of November," including 13 to Egypt, the top importer of the grain.

"This will strain their infrastructure and could result in some activity being pushed into December."