HAMBURG/PARIS: Algeria’s state grains agency OAIC purchased around 800,000 tonnes of milling wheat in an international tender, with Russian-origin wheat expected to provide a substantial part of the volume supplied, European traders said.
This was up from estimates of about 600,000 tonnes earlier on Wednesday. Estimates of purchase price remained around $382.50 to $384 a tonne c&f, the same as on Tuesday evening, traders said.
Russian wheat was believed to have been sold in the tender, traders said.
“Ships are being sought today to transport wheat from Russia to Algeria,” one trader said. “There is market talk that maybe a third of the total purchase on Tuesday could come from Russia.”
A relaxation of OAIC’s bug (insect) damage limit in late 2020 led to a small number of Russian shipments in recent months.
Terms for the latest tender showed the bug damage limit had been increased further, to 1% maximum from 0.5% previously, raising expectations of more offers of Russian wheat.
Algeria is the main export market for European Union wheat, particularly France.
“Algeria seemed to be actively seeking origins away from France in the latest tender,” another trader said. “Russian wheat was sold for second half December shipment despite the problems with the Russian export tax.”
“Poland and Argentina will be among the other origins supplied for the rest.”
Algeria does not release results of its tenders, and reports are based on trade estimates.
The origin of the wheat bought by OAIC is at the seller’s option, which means the supply countries can be uncertain until loading.
The wheat was sought for shipment in three periods from the main supply regions including Europe: in 2021 between Dec. 16-31, and in 2022.
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