Algeria’s state grains agency, OAIC, has reportedly secured a substantial quantity of milling wheat ranging between 870,000 to 900,000 metric tons in an international tender, surpassing earlier market expectations. The procurement, conducted amidst competitive pricing dynamics, is anticipated to draw supplies from diverse origins, with a notable emphasis on Black Sea wheat, including offerings from Russian exporters.
The participation of around ten trading houses in the tender has made it challenging to determine the precise total purchased volume, with estimates varying between the lower end of 870,000 tons and potentially reaching up to 1 million tons. The pricing range for the wheat was reported to be between $227.00 to $228.00 per metric ton, inclusive of cost and freight (c&f), with some assessments indicating a lower end at $227.00 per ton.
The procurement of wheat from optional origins underscores the allure of competitive pricing, with expectations pointing towards a significant influx of Black Sea wheat into Algeria’s supply chain. Notably, European wheat futures experienced a dip to 3-1/2-year lows recently, influenced by the downward pressure exerted by declining prices for wheat sourced from Russia and other Black Sea exporting countries.
Algeria’s strategic wheat purchases play a crucial role in securing its domestic supply needs, with a focus on sourcing wheat for shipment during two distinct periods in June from key supply regions, including Europe. While the European Union, particularly France, has traditionally been a vital supplier of wheat to Algeria, the growing presence of Russian exporters in the Algerian market is reshaping trade dynamics.
Algeria’s discretion in releasing tender results necessitates reliance on trade estimates for insights into market developments. Subsequent assessments are expected to shed further light on pricing trends and the final volume procured, reflecting the intricate interplay of global wheat trade dynamics and Algeria’s evolving procurement strategies.