Algeria is expected to host a significant amount of Russian wheat in a tender for a total of 700,000 to 800,000 tons. The North African country had changed its tender terms to reduce its reliance on French supplies, European traders said.
In recent assessments, traders see the volume of milling wheat, which the Algerian state grain authority OAIC booked in this week's tender, at 720,000 to 750,000 tons.
Some estimates this morning put the volume even higher at 800,000 tons.
Purchase prices of $ 382.50 to $ 384 per ton of c & f were quoted. This is in line with the first reports following Tuesday's call for tenders.
Around 270,000 tons of the OAIC purchase are expected to be shipped from Russia. That would be a breakthrough for Russian exports to Algeria.
"Ships are currently being sought to transport wheat from Russia to Algeria," said a trader.
A relaxation of the OAIC insect damage limit in late 2020 has resulted in a small number of Russian deliveries in recent months.
The conditions for the last tender showed that the damage limit was increased from 0.5% previously to a maximum of 1%, which aroused expectations for more offers for Russian wheat.
Algeria is the European Union's most important wheat export market, especially France.
French wheat was not expected to generate sales in this week's bid, with OAIC looking to expand the group of vendors in this high-price year, traders said.
Other countries of origin for new purchases are likely to be Poland, Germany and Argentina, added dealers.
"Algeria can depress prices by reducing its dependence on French wheat," said another trader. "In times of such high wheat prices, increasing competition will undoubtedly lower Algeria's purchasing costs."
Algeria does not publish the results of its tenders. The origin of the wheat bought by OAIC is at the seller's discretion, which means that the countries of delivery may be uncertain until loading.
The wheat was sought for shipping in three time periods from the main supply regions including Europe: December 16 to 31 in 2021 and January 1 to 15 in 2022 and January 16 to 31.
If you purchase from South America or Australia, the shipment will be one month earlier
Source
Hansa Terminhandel GmbH