Algeria buys less wheat as France trims export forecast

Algeria’s OAIC bought 150,000 mt of wheat at tender Tuesday, a smaller volume than usual, as it sought to limit the impact of rising global prices.

OAIC was said to have paid $225-$226/mt CFR for June wheat, while at its previous tender in mid-February, Algeria paid approximately $225/mt CFR for 340,000 mt of milling wheat for April-May delivery.

OAIC does not talk to the media, nor does it publish details of its tenders.

The tender came on the same day as French agriculture agency FranceAgriMer cut another 500,000 mt from its export forecast to countries outside the EU, with total now at 8.5 million mt.

Algeria limiting its buying is bad news for French exporters, which have relied on Algeria for almost 60% of its foreign sales in the 2017/18 marketing year and have failed to capitalise on recent competitiveness.

Cash prices have been on the rise globally, tracking futures and starting to show signs of tightness of supply as the northern hemisphere moves towards the end of its marketing year.

French 11.5% protein milling wheat prices were around $205/mt FOB Rouen Wednesday.

This compares to Argentina – which along with France supplies the bulk of Algeria’s wheat imports – which has seen rising prices on the back of tightening supply.

Offers for 12% protein milling wheat have been all but absent from the market in recent weeks, causing prices to rally over 16% since the start of the year to $206.50/mt FOB Up River.

Russian 12.5% protein milling wheat is currently at $207/mt FOB Novorossiysk, up 9% from the start of the year, although Algeria does not yet permit the import of Russian wheat.