HAMBURG: Only two trading houses submitted offers in the tender from Iraq's state grains board to buy at least 50,000 tonnes of hard wheat which closed on Monday, European traders said.
The lowest offer was $318.77 a tonne c&f free out for wheat sourced from Australia, traders said.
It is thought no purchase has yet been made in the tender, they said.
Ten or more trading houses have generally participated in past international tenders from Iraq.
"The worry about payment and other conditions remains too high and there is expectation in the market that the tender will be cancelled," one trader said.
There has been uncertainty about Iraq's grain buying strategy after the country's trade ministry said in April it would negotiate more direct contracts for the import of rice and wheat after failures to secure them through international tenders.
Traders said major rice and wheat buyer Iraq also told them in March it will delay payments for their goods, making payments in instalments because of low oil prices and other financial restraints. This was said to have reduced participation in tenders by major grain trading houses.
Monday's tender had sought wheat sourced optionally from the United States, Canada or Australia, with offers having to remain valid up to July 9.
Only Australian and US wheat was offered in the tender.
The single offer for Australian wheat was made for 50,000 tonnes.
The lowest offer for US wheat was $319.07 a tonne c&f free out but the offer was valid for July 3 only. The lowest offers for validity up to July 9 were $320.77 to $324.07 a tonne c&f free out.
Prices for extended validity were higher because of the strong rise in US wheat futures in the past days, in turn because of concern about harvest damage to US crops, traders said.
Iraq was believed to have cancelled its previous international tender to buy at least 50,000 tonnes of wheat, which closed on June 4 with no purchase having been made.
Volumes in Iraq's tenders are nominal and the country has in the past frequently bought more than the tonnage originally requested.
Comments
Comments are closed for this article.