Egypt hails competitive price of French wheat

Egypt, the world's top wheat importer, hailed the growing competitiveness of French supplies as it bought from the European Union's top exporter for the first time since June.

Results of the latest tender by Egypt's state grain buyer, the General Authority for Supply Commodities, showed Argentina retaining its recently-secured place as price leader, even after a rise in its cheapest offer of more than $6 in a week to $226 a tonne.

Gasc bought 60,000 tonnes of Argentine wheat from Louis Dreyfus.

However, it also bought 60,000 tonnes of French wheat, the first such purchase of 2011-12, after a further drop in prices to $240.50 a tonne, down $4 from the cheapest offered in last week's tender.

The drop took French wheat below all offers from Russia, which has dominated Egypt's wheat trade since returning to exports in July following a drought-reduced 2010 harvest.

"I'm glad that French wheat is again competing in the Egyptian market," Nomani Nomani, the Gasc vice-chairman, said.

Russia loses its edge:
Indeed, while Gasc also bought 60,000 tonnes of Russian wheat, that winning offer, priced at $243.98 a tonne, relied on the low shipping costs from the Black Sea to Egypt to squeak past other cheap bids from France.

Merchants' ability to gain further supplies of competitively-priced Russian wheat has been hampered by a dwindling in supplies in areas near to ports, already sapped by the roaring start to 2011-12, and increased competition with domestic users.
Russian domestic prices for fourth-grade wheat, the export benchmark, rose 75 roubles last week to 5,775 a tonne, according to SovEcon.

"The main driver behind the rise is demand from domestic processors, who are building up stocks ahead of lengthy holidays in the end of December and in January, when the market activity will be minimal," the Moscow-based analysis group said.

SovEcon added that "the rise of domestic prices in the last few weeks lowers the competitiveness of Russian grain" at a time when prices of grains from other origins is falling.