France strengthened its grip as top wheat supplier to the world’s biggest importer, Egypt’s Gasc grain authority, as offers of Russian wheat evaporated, sidelined by the country’s export levy.
Gasc, at its first tender of 2015, purchased 180,000 tonnes of French wheat for an average price of a little under $250 a tonne, excluding freight.
The order took above 3.0m tonnes the amount of wheat that Gasc has purchased so far this season, which started in July, of which France – the European Union’s top producer and exporter – has been the top origin, at 1.32m tonnes.
While France was only the fourth biggest supplier to Gasc last season, behind Romania, Russia and Ukraine, its promotion this time is in part a reflection of the poorer quality of its wheat harvest last year.
Gasc has lower hurdles for some quality specifications – such as Hagberg falling numbers, a measure of grain sprouting – than some of France’s other regular customers, notably Algeria, which has turned to other origins such as Germany, Poland and the UK to fulfil its needs.
No Russian offers
However, French predominance also reflects weak quality in Romania and Ukraine, and setbacks to Russian exports posed by a plunging rouble, which has encouraged farmers to hang onto dollar-denominated crops, and most recently Moscow’s moves to curb exports.
Indeed, at Thursday’s tender Gasc received no Russian offers, for only the second time in the past year.
Gasc specified a delivery on February 8-18 – sidelining Russian supplies, which will from February 1 attract an export levy of at least E35 a tonne.
Gasc has, though, in recent tenders attracted offers of wheat from Argentina, whose standing as a global exporter has diminished with wheat harvests in 2012-13 and 2013-14.
Argentina’s harvest is expected to improve this season, in part thanks to a return to the crop by growers who saw mixed results from switching to barley, which gained popularity largely because it is subject to fewer export controls.
However, persistent rains in the south of Buenos Aires, the top growing province, have curtailed somewhat expectations, with the Buenos Aires grains exchange on Thursday cutting its estimate for the harvest, which has only some 4% to go, estimate by 300,000 tonnes to 11.2m tonnes.
Yields in south east Buenos Aires had, at 3.81 tonnes per hectare, fallen some 0.4 tonnes per hectare below expectations, “largely due to high temperatures during winter”, besides the impact of “frequent and abundant rainfall in the region for much of the year”.
Nonetheless, the Argentine harvest this year will rise 10.9% year on year, on the exchange’s estimates.
Argentine wheat as offered to Gasc at $252 a tonne excluding freight, in line with the cheaper French offers, but rendered uncompetitive by the larger costs of shipping grain to Egypt across the Atlantic.
(Source – http://www.agrimoney.com/news/france-lifts-wheat-sales-to-egypt-as-levy-stymies-russian-offers–7846.html)