Canada regains favour among Egypt's wheat buyers

Canada, which has got into difficulty meeting Japanese wheat import term, has regained favour with the world's top buyer, winning its first shipments to Egypt through tender in four months.

Egypt's main state-run grain buyer, the General Authority for Supply Commodities (Gasc), said after its second wheat tender in less than a week that it was to take 170,000 tonnes of the cereal, with origin split between Australia, Canada and the US.

The awards to Australia and the US followed the recent pattern, since dwindling stocks accelerated price rises in wheat from France - Egypt's default grain trade partner thanks to its position at the other end of the Mediterranean.

However, Canadian wheat has not won at an Egyptian tender since October.

Indeed, Canada triggered doubts over its ability to compete on quality last month when it failed to fill a tender from Japan, its fourth-largest customer, because of concerns over whether wheat protein levels would reach the circa-13.5% required.

East vs west

Canada's ability to meet the cut with Gasc, which also enforces stringent protein requirements, appeared to reflect the Jekyll and Hyde nature of the country's harvest last year, Macquarie analyst Alex Bos said.

The grain which missed out on Japan was spring-sown wheat from the west of Canada, the home to the main agricultural states such as Saskatchewan, where both the quality and the quantity of last year's crop were damaged by heavy rains.

However, Egypt had purchased soft red winter wheat from the east of the country, which had missed out on weather damage.

"They had a greater winter wheat crop in Ontario," Mr Bos said.

"They have the supply just when the world is calling out for wheat," he said.

Priced out

The winning Canadian wheat was offered, by Nidera, at $358.50 a tonne, excluding shipping costs of $27-28 a tonne.

The cheapest French wheat was tendered by Louis Dreyfus at $378.74 a tonne, without freight costs.

Gasc has not bought French wheat at tender since early December, when it paid Glencore $324.50 a tonne, excluding shipping.

Japan a week ago resumed purchases of west Canadian wheat, with the Canadian Wheat Board offering 37,000 tonnes with a guaranteed minimum protein level of 13.3%.

(Source: http://www.agrimoney.com/news/canada-regains-favour-among-egypts-wheat-buyers---2814.html)