Egypt's GASC buys 120,000 tonnes of Russian, Romanian wheat

ABU DHABI: Egypt's state grain buyer, the General Authority for Supply Commodities (GASC), said on Tuesday it had bought 120,000 tonnes of Russian and Romanian wheat in a tender for June 16-25 shipment.

Egypt, the world's biggest importer of wheat, bought 60,000 tonnes of Russian wheat from Vitol and 60,000 tonnes of Romanian wheat from Cargill, Mamdouh Abdel Fattah, GASC vice-chairman, said.

The wheat was purchased at an average price of $205.76 a tonne on a cost-and-freight basis, he said.

Traders gave the following breakdown of the purchase: -60,000 tonnes of Russian wheat from Vitol at $194.22 a tonne free-on-board (fob) and $9.40 a tonne freight -60,000 tonnes of Romanian wheat from Cargill at $199.50 a tonne fob and $8.40 a tonne freight After this latest tender, Egypt's strategic wheat reserves will last until mid-July, Supplies Minister Khaled Hanafi said in a statement.

Russian wheat was offered at attractive prices in the tender, lower than the French, Polish and US origins.

"The reason for the cheapness of Russian wheat in the Egyptian tender is the anticipation that Russian export taxes will be removed at least by the beginning of July," he said.

"Without the tax Russian prices in roubles calculate as competitive in export markets."

Russia is expected to take a decision by mid-May on removing a tax on wheat exports ahead of schedule and will set up a new mechanism in case it needs to act quickly to regulate trade in the future.

Russia, one of the world's major wheat exporters, initially imposed the tax from Feb. 1 until June 30 to cool domestic prices for wheat and related foods after the rouble tumbled late last year.

Egypt is also in the process of buying local wheat from its farmers.

Supplies minister Khaled Hanafi said earlier on Tuesday that up to 1.6 million tonnes of Egyptian wheat have been purchased so far since the start of the season in mid-April.

Egypt is aiming to buy a total of 3.7 million tonnes this season. Achieving that target would give Egypt sufficient wheat reserves to last until October.