Tender Details: Increased Prices and Supplier Bids

Egypt's General Authority for Supply Commodities (GASC) conducted an international tender on May 8 for the procurement of flour wheat, resulting in the acquisition of a substantial volume. However, the prices offered in this tender exceeded those of previous auctions, marking a significant uptick. Notably, there was a surge in the number of tender applications for Russian and French wheat, with bid prices rising by $20-38 per ton, reminiscent of levels observed in January 2024. Surprisingly, Ukrainian wheat did not participate in this tender round.

Procurement Outcome: Purchase Specifications and Costs

• Following the tender, GASC finalized the purchase of 420,000 tons of flour wheat, scheduled for delivery between June 7 and 28, with payment terms set at 270 days post-opening of the letter of credit.
• The average procurement price stood at $279.22 per ton Cost and Freight (C&F), representing a notable increase of $23.24 per ton compared to the April 16 auction.
• Specifically, the procurement included 360,000 tons of Russian wheat and 60,000 tons of Romanian wheat, sourced from various suppliers.

Historical Procurement Patterns by GASC

The recent procurement by GASC reflects a departure from historical patterns, with notable fluctuations in procurement volumes and prices. Previous tenders have seen acquisitions of wheat from various origins, with varying price points and delivery schedules. Notably, GASC's procurement decisions have sometimes coincided with periods of rising global prices, as observed in the recent acquisition of Russian wheat.

The procurement of wheat by Egypt's GASC at higher prices in the recent tender underscores the complexities of global grain markets. Factors such as supply dynamics, currency fluctuations, and geopolitical influences can impact procurement decisions and subsequent price trends. Moving forward, continued monitoring of market conditions, including changes in supply and demand dynamics, will be essential in understanding potential fluctuations in wheat prices. Additionally, factors such as weather patterns, harvest forecasts, and international trade policies can further influence market sentiment and price trajectories.