According to European traders, Algeria’s state grains agency OAIC is believed to have purchased between 810,000 and 840,000 metric tons of milling wheat in an international tender on Tuesday. This was higher than the initial trader estimates of around 800,000 tons on Tuesday evening, with some estimates on Wednesday reaching as high as 900,000 tons.
The prices were mostly reported to be between $279 to $279.50 per ton, cost and freight (c&f) included. Some price estimates on Wednesday were as low as $278 per ton c&f.
The wheat is expected to come from optional origins, but traders believe that a large volume will be supplied from the Black Sea region, including Ukraine, Romania, Bulgaria, and possibly Russia. However, non-Russian Black Sea supplies were considered best placed for sourcing, as Russian exporters were said to have been hampered by the Russian government’s unofficial minimum export price, which was imposed to restrain exports and cool Russian flour prices.
Some wheat in the Algerian tender was also expected to be sourced from France and possibly Germany.
The wheat was sought by Algeria for shipment in two periods from the main supply regions, including Europe: Aug. 1-15 and Aug. 16-31. If sourced from South America or Australia, the shipment is expected to be a month earlier.
Algeria is an important customer for wheat from the European Union, especially France, but Russian and other Black Sea region exporters have been expanding strongly in the Algerian market.
In its previous large-scale soft wheat purchase, reported on May 3, Algeria bought between 240,000 and 300,000 tons of milling wheat at about $249 per ton c&f. Since then, prices have hit 10-month highs on concerns over weather damage to the harvest in Russia.