Algeria's OAIC buys 540k wheat, pays $7/mt less for Feb shipment

Algeria’s state-backed grain importing agency has booked up to 540,000 mt of milling wheat in a tender that closed Wednesday and paid around $7/mt less than at its previous tender, trade sources have told Agricensus.

Office Algerien Interprofessional des Cereales (OAIC) has paid around $348-349/mt CFR for whole February delivery after booking the volume.

Trade sources expected that the bulk of the volume will be sourced from the EU Black Sea, Russia, and Ukraine, but also some could still be supplied from France.

However, at the current agreed price levels, it looks difficult to supply from France even with a potential freight advantage.

France and Romania/Bulgaria typically have a freight advantage which can mean they are competitive even with FOB prices at much higher levels compared to other Black Sea countries.

Freight levels from France into Algeria were heard in the $22-26/mt range, compared with freight ideas from Ukraine into Algeria heard at around $60-62/mt.

However, some sellers in Ukraine are said to be offering wheat with a huge discount in a bid to remain competitive, meaning the lowest offer for 11.5% was heard in the market at $275/mt FOB POC.

The breakdown of the sellers that are believed to have sold to Algeria was said to include Viterra with the lion’s share of 180,000 mt, Cargill selling 120,000 mt, and Sierentz and Cam Negoce selling 60,000 mt.

Also, Casillo, Louis Dreyfus, Lecureur and Avere secured 30,000 mt each.

At its previous tender, which closed December 1, OAIC booked at least 420,000 mt of milling wheat for January shipment paying $355.50/mt CFR on average.

This recent purchase also pushed the wheat volume booked by Algeria to around 4 million mt for delivery during the 2022/23 marketing year, according to the Agricensus Tender Dashboard, with 2.05 million mt already supplied from the EU (mostly France) and 823,000 mt from Russia.

Meanwhile, the US Department of Agriculture (USDA) has estimated Algeria's wheat buying this year would reach 8.2 million mt.

For more information on Algeria’s recent buying, please see our Tender Dashboard.