Algeria buys about 240,000 tonnes wheat in tender, traders say

• Wheat prices have surged in the past week as panic buying of staple goods triggered by the coronavirus crisis has added to demand at a time when European wheat exports are brisk.
• Lockdown measures to contain the coronavirus in France have added to transport difficulties for grain firms trying to cover the hefty export programme.

HAMBURG: Algeria's state grains agency OAIC bought around 240,000 tonnes of optional-origin milling wheat in an international tender which closed on Tuesday, European traders said on Wednesday.

Initial assessments put prices paid at about $242.50 to $243 a tonne, cost and freight (c&f), they said.

The relatively small volume could be a consequence of the coronavirus epidemic, in particular logistical difficulties in France, Algeria's main wheat supplier, the traders said.

Algeria does not disclose the results of its tenders and purchase reports are based on trade estimates.

Wheat prices have surged in the past week as panic buying of staple goods triggered by the coronavirus crisis has added to demand at a time when European wheat exports are brisk.

"Euronext prices rose strongly since mid-March and this has made the latest purchase much more expensive than the last one, which I think is a major reason for the relative small purchase by Algeria this time," one trader said.

Logistical concerns in France, which is expected to ship a near-record volume of wheat outside the European Union this season, may also have made trading firms reluctant to offer large volumes in Tuesday's tender, traders added.

Lockdown measures to contain the coronavirus in France have added to transport difficulties for grain firms trying to cover the hefty export programme.

French wheat was nonetheless expected to be chosen to fill the latest Algerian purchase, traders said.

The tender called for shipment from the main supply countries in two periods - June 1-15 and June 16-30. If sourced from South America, shipment is between May 1-15 and May 16-31.

In its last reported tender on March 12, the OAIC bought around 680,000 tonnes of milling wheat at between $226 and $227 a tonne c&f.