Egypt Expected to Buy U.S. Wheat

By CnAgri Print

Egypt, the world抯 biggest wheat importer, is likely to resume purchases of supplies from the U.S. in its next state grain tender, said Sadri Mathari, chief commercial officer with Venus International, the country's largest private trader of the grain. Bloomberg News reports that Egypt's General Authority for Supply Commodities, the state grain buyer, likely has enough wheat to last until the end of this year, with the next tender occurring after the start of 2013, said Mathari, whose company trades 2.5 million to 3.5 million metric tons of grain a year. Venus operates in a free zone in the Port of Dekheila, allowing it to buy grain from the U.S., the Black Sea region and other places around the world, and sell it into GASC tenders.

"The foreign exchange factor will influence the direction of French prices, but I believe that the next tender we see in Egypt will be 50/50 U.S. and France," Mathari said in an interview in Geneva.

Milling-wheat futures for March delivery on NYSE Liffe in Paris traded at 269 euros a ton, equal to about $9.33 a bushel. The grain was almost 72 cents a bushel more expensive than March futures on the Chicago Board of Trade, the global benchmark, the widest price spread on record for the two contracts. Prices in Paris jumped 39 percent this year, outpacing the 17 percent increase for the contract on the CBOT, as dry weather cut supplies in Russia and eastern Europe.

Egypt hasn't bought U.S. wheat in a state tender since a purchase of 115,000 tons in April, which included 60,000 tons from Venus, according to data compiled by Bloomberg. Supplies from Russia and eastern Europe dominated imports until September, when the north African country began purchasing more French supplies.

The U.S. Department of Agriculture estimates that Egypt will import 9.5 million tons of wheat in the 2012-13 season, the least since 2007-08 and down from 11.65 million tons in 2011-12. Total imports may be closer to 7.5 million tons, because the country has increased domestic production, Mathari said.