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| 19 September, 2017

Trade row bites as Egypt gets fewer offers in wheat tender

Egyptian farmers thresh wheat with the help of a machine in a field on the outskirts of Cairo, May 19, 2008.

Egyptian farmers thresh wheat with the help of a machine in a field on the outskirts of Cairo, May 19, 2008.

REUTERS/Asmaa Waguih


DUBAI/CAIRO- Egypt's state grain buyer GASC received fewer offers and was quoted higher prices in a wheat tender on Tuesday, as traders held back due to a dispute over two blocked import cargoes.

GASC received offers from six suppliers, down from the roughly 15 that normally bid to the world's largest wheat buyer.

One Cairo-based trader said prices offered included a risk premium of between $4 and $11 a tonne.

Traders said the lower participation and higher prices were due to uncertainty after Egypt referred a Romanian and a French cargo to its prosecutor for containing poppy seeds.

The prosecutor has not made a decision yet but the cargoes are expected to be released after sieving. Still, suppliers fear the process could take months amid high costs for demurrage. br>
The case is reminiscent of a dispute last year when traders shunned Egyptian tenders after the country briefly introduced a zero-tolerance policy towards the common grain fungus ergot.

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"There is serious worry about the poppy seeds problem which has reduced tender participation today. This could cause vessel delays in ports of several weeks, even up to a month," a European trader said.

In the tender, Egypt is seeking cargoes for shipment Oct. 21-31. Results are due later on Tuesday.

The lowest offer was $195 a tonne free-on-board for 60,000 tonnes of Russian wheat, while the best price after shipping costs was for $212.20 a tonne cost and freight for a 60,000 tonne Russian cargo.

The Cairo trader said the risk premium added to the Russian wheat was around $4 a tonne, while French and Romanian wheat were quoted $10 and $11 a tonne higher respectively.

Traders said the following offers were made in dollars per tonne on an FOB basis:



*ADM: 60,000 tonnes of Russian wheat at $195; 60,000 tonnes of Romanian wheat at $204.25

*Solaris: 60,000 tonnes of Russian wheat at $201.02

*GTCS: 60,000 tonnes of Russian wheat at $198 and 60,000 tonnes of Russian wheat at $199.50; 55,000 tonnes of Russian wheat at $197

*Friends: 60,000 tonnes of Russian wheat at $198.89 and 60,000 tonnes of Russian wheat at $199.99

*Cofco: 60,000 tonnes of Romanian wheat at $204.99

*Casillo: 60,000 tonnes of French wheat at $208.90



Traders also said the following were the best cost and freight (C&F) offers made in the tender:

*ADM: 60,000 tonnes of Russian wheat at $195 a tonne FOB and $15.50 freight equating to $210.50 C&F

*GTCS: 60,000 tonnes of Russian wheat at $198 FOB and $14.20 freight equating to $212.20 C&F

*GTCS: 55,000 tonnes of Russian wheat at $197 FOB and $16.25 freight equating to $213.25 C&F

*Friends: 60,000 tonnes of Russian wheat at $198.89 FOB and $14.20 freight equating to $213.09 C&F

*GTCS: 60,000 tonnes of Russian wheat at $199.50 FOB and $14.76 freight equating to $214.26 C&F

*Friends: 60,000 tonnes of Russian wheat at $199.99 FOB and $14.76 freight equating to $214.75 C&F

*Solaris: 60,000 tonnes of Russian wheat at $201.02 FOB and $15.05 freight equating to $216.07 C&F



(Reporting by Maha El Dahan, Eric Knecht, Michael Hogan and Valerie Parent; Editing by Jason Neely and Mark Potter) ((Maha.Dahan@thomsonreuters.com; + 9712 4082101; Reuters Messaging: maha.dahan.thomsonreuters.com@reuters.net))