Algeria buys an estimated 600,000 tonnes milling wheat

HAMBURG/PARIS: Algeria's state grains agency OAIC purchased an estimated 600,000 tonnes of optional-origin milling wheat in an international tender late on Tuesday, European traders said in assessments on Wednesday.

It was purchased at about $263.50 a tonne C&F, traders said. One trader put the price at between $263.50 and $264 a tonne C&F.

Seven trading houses were believed to have made sales.

The tender had been the first from the OAIC in which wheat from Russia and other Black Sea suppliers could be offered, but only for higher protein wheat grades.

Traders said they believed the wheat was likely to be sourced from the Baltic Sea region or elsewhere in the west European Union including France and Germany.

"I think Russian wheat is too expensive for this purchase," one European trader said.

Algeria is traditionally France's largest export customer.

Black Sea wheat from Russia and Ukraine was not banned by Algeria, but the country's strict insect damage limit effectively removed it from purchases.

Traders said in September that the OAIC had increased its tolerance level for 12.5% protein wheat to 0.5% bug (insect) damage in purchase tenders.

Algeria's bug damage standards for 11% protein wheat will remain at 0.1%, a level that Russian and other Black Sea supplies cannot usually meet, so giving France and the western EU a continued advantage for lower protein wheat.

"High Russian wheat prices should give the west EU and Baltic a continued lead in Algerian purchases for the near future," another trader said.

The wheat in this week's tender was for shipment in two periods from the main supply countries, Nov. 1-15 and Nov. 16-30. South American shipment is between Oct. 1-15 and Oct. 16-31.