Source: APKinform (Ukraine)
According to market participants, Egypt’s latest tender to import 3.8 million tons of wheat failed because state buyer GASC tried to delay payment terms, Reuters reports.
As a reminder, GASC bought only 7% of the announced volume – 280,000 tons for $241-242.25 per ton FOB, while in the previous tender in July, GASC contracted 770,000 tons and paid $221 per ton FOB.
The importer’s desire to secure a large supply of wheat was fueled by the drop in world wheat prices to a four-year low, but resulted in the purchase of a much smaller quantity at a higher price.
Over 100 price bids were received in response to the tender, but they were high, ranging from $244 to $350 per ton for free delivery, well above the market price. These were the terms for the wheat delivery, as the seller would have had to wait almost a year for payment. Traders point out that financial risks were factored into the offers, negating the benefits of buying large quantities.