Egypt has clinched a contract with Russia to buy an additional 600,000 tons of Russian wheat following an international tender conducted by the country's state grain buyer, the General Authority for Supply Commodities (GASC).
According to GASC's statement, the purchase goes in line with the framework of the Supply and Internal Trade Ministry's strategy to enhance the country's stocks of commodities.
It was noted that in the next month, Egypt will receive 600,000 tons of wheat from Russia, 300,000 tons of which will be shipped between May 10 and 20. The remaining 300,000 tons are expected to be shipped between May 21 and 31.
The wheat was sold by two Russian companies - Aston (120,000 tons) and Grain Flower (480,000). Traders stated that all the cargoes were sold at a FOB price of $275 per ton, with a C&F price of $293.
Apart from the Russian companies, Ukrainian, Bulgarian, French and Romanian ones participated in the tender, putting up their wheat for sale. The Ukrainian one was not selected, even though the prices they offered were lower than those of Russia ($272-$273 FOB). Meanwhile, Bulgaria proffered its grain on the same terms for $284.84, Romanian wheat was even more expensive (from $285 to $291.99), and the French offer was the costliest one of all ($288.5 - $291.82).
Russia, Egypt as World's Top 'Wheat Traders'
According to the Observatory of Economic Complexity website, Russia is the world's largest exporter of wheat, while Egypt is a top importer.
In the 2023-24 marketing year, Egypt's wheat imports are expected to rise by 3%, to 10.8 million tons. The forecast for wheat exports from Russia in March 2023 increased to a record 4.8 million tons since the beginning of the season (a record since October 2022, when wheat exports amounted to 4.79 million tons). At the same time, in general, grain exports will amount to 6.05 million tons, which will be a record since September 2020, when 6.13 million tons were exported, according to Rusagrotrans, a Russian railway infrastructure operator for transportation of grain and fertilizers.
The Russian Federation is the largest supplier to the Egyptian wheat market, delivering almost 5 million tons to the North African country in the 2020-21 marketing year, according to the World Grain portal.
Over the past several months, Russia has provided Egypt with a huge amount of wheat, despite the US-led Western sanctions and the Ukrainian conflict. In January this year, Elena Tyurina, director of the analytical department of the Russian Grain Union, said that deliveries had almost doubled in the final months of 2022. She also noted that Egypt was the biggest buyer of Russian wheat.
Furthermore, in February, Tyurina announced that the wheat supplies to Egypt had more than tripled compared to the same month last year, reaching approximately 800,000 tons.