Algeria wheat tender purchase reaches 700,000 tonnes

HAMBURG/PARIS: Algeria’s state grains agency OAIC is believed to have purchased around 700,000 tonnes of optional-origin milling wheat in an international tender, European traders said on Thursday. Some traders pegged the volume at 720,000 tonnes. Previous estimates were closer to 600,000 tonnes.

Algeria, one of the world’s biggest wheat importers, does not disclose details of its tenders and reported results are based on assessments by traders. OAIC was thought to have made an initial purchase on Wednesday when the tender officially closed, before continuing negotiations on Thursday when it booked additional volume, according to traders.

Negotiations on Thursday were made more difficult because Egypt’s state buyer GASC was also in negotiations about a snap purchase tender on Thursday. Estimates for purchase prices in Algeria’s tender were around $346.50 to $345.50 a tonne, cost and freight (c&f) included, traders said, with some citing a higher price of $347 for a part of the purchase.

The tender was believed to have finished but further assessments of prices and volume were still possible, traders added. Black Sea origins were expected to be among the sources, underscoring the growing presence of the region in Algeria’s tenders this season after the North African country modified its terms to encourage more competition.

Traders said they believed French wheat was permitted in the tender after Algeria turned away from French supplies recently after political tension between the two countries. However, chances for French wheat to fill part of the order were seen as limited due to competitive Black Sea prices and potential penalties for a mixed-quality French crop, traders said.

Algeria buys wheat on an optional-origin basis, which means the seller has until the subsequent shipment period to choose the source of the grain. The wheat is sought for shipment on April 1-15 and April 16-30 from the main supply regions including Europe. If sourced from South America or Australia, shipment is one month earlier.