PARIS: European wheat prices rose on Wednesday after Egypt’s first purchase of French wheat in almost a year raised hopes of further exports in a market that has been dominated by Black Sea origins.
Benchmark March milling wheat on Paris-based Euronext closed 0.6% up at 282.25 euros ($320.10) a tonne.
Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), bought 300,000 tonnes of wheat in an international tender for shipment Feb. 15 to Mar. 3, including 60,000 tonnes of French wheat, it said on Wednesday.
The last time GASC bought French wheat was in early February.
Since then the office favoured cheaper offers for Black Sea wheat origins including Russia, Romania and Ukraine.
“It is only one cargo but certainly good news for French and West European wheat exports in general,” one trader said.
Offers to GASC released earlier in the day had shown that French wheat was offered at the lowest FOB price to Egypt, though higher shipping costs from France meant Ukrainian and Romanian wheat were cheapest with cost and freight (c&f) included.
German traders were cheered by signs that the dominance of the Black Sea region in wheat export markets was weakening, as shown in price offers.
“It was encouraging to see French wheat back in the picture on FOB terms, although the higher shipping costs from western Europe still give the Black Sea an advantage in the big Middle Eastern markets,” one German trader said.
“But the EU shipping was just under $10 a tonne more expensive than the Black Sea. A relatively small drop in Euronext prices to compensate for the high shipping costs could change the EU export outlook sharply.
“Russia’s export taxes seem at last to be too much of a burden for Russian wheat in Egypt’s tenders.”
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