|09 September, 2019

Saudi Arabia's SAGO says it has bought 780,000 T wheat in tender

The wheat was bought at an average price of $217.79 per tonne, SAGO said

Image used for illustrative purpose. Ears of wheat are seen in a wheat field in Marcheprime near Bordeaux, France, June 4, 2018.

Image used for illustrative purpose. Ears of wheat are seen in a wheat field in Marcheprime near Bordeaux, France, June 4, 2018.

REUTERS/Regis Duvignau

DUBAI  - Saudi Arabia's state grain buyer, the Saudi Grains Organization (SAGO), said on Monday it had bought 780,000 tonnes of wheat in a purchase tender, the first to permit offers of wheat from the Black Sea region.

The wheat offered was from the European Union, the Black Sea region, North America (excluding Canada) and South America, SAGO governor Ahmad A. Al Fares said in a statement. The seller has the freedom to select the origin to be supplied.

The wheat was bought at an average price of $217.79 per tonne.

SAGO said these purchases were made in dollars a tonne with port of unloading, seller, price and arrival period:

Jeddah: - 60,000 tonnes hard wheat from Holbud Limited at $214.00 C&F (Nov. 10-20, 2019) - 65,000 tonnes hard wheat from Bunge at $215.19 C&F (Nov. 10-20, 2019) - 60,000 tonnes hard wheat from Holbud Limited at $214.40 C&F (Nov. 20 -30, 2019) - 60,000 tonnes hard wheat from Holbud Limited at $214.69 C&F (Dec. 1 – 10, 2019) - 60,000 tonnes hard wheat from Holbud Limited at $214.78 C&F (Dec. 10 – 20, 2019) - 60,000 tonnes hard wheat from Glencore at $216.67 C&F (Dec. 10 – 20, 2019) - 60,000 tonnes hard wheat from Holbud Limited at $215.89 C&F (Dec. 20 – 30, 2019) - 60,000 tonnes hard wheat from Holbud Limited at $216.23 C&F (Jan. 1 – 10, 2020) - 60,000 tonnes hard wheat from Louis Dreyfus at $217.44 C&F (Jan. 1 – 10, 2020)

Dammam: - 60,000 tonnes hard wheat from Holbud Limited at $223.90 C&F (Nov. 20-30, 2019) - 60,000 tonnes hard wheat from Holbud Limited at $224.47 C&F (Dec. 10-20, 2019) - 60,000 tonnes hard wheat from Holbud Limited at $224.89 C&F (Jan. 1-10, 2020)

Jizan: - 55,000 tonnes hard wheat from Holbud Limited at $219.00 C&F (Dec. 10-20, 2019)

Saudi Arabia said in August it would relax bug damage quality requirements in wheat tenders. urn:newsml:reuters.com:*:nL8N2543MI Wheat from the Black Sea did not previously meet Saudi specifications for a zero level of insect damage.

Russia has long sought access to Saudi Arabia's wheat market as it seeks to win a bigger share of Middle Eastern and North African wheat exports from the EU and United States.

Asked by Reuters if the latest purchase could include Black Sea supplies, Al Fares said: "SAGO does not specify any origin, SAGO explicitly specifies the grain's quality parameters only. The supplier has the option to originate grain from any of their three options offered as part of their bid to SAGO, for arrival inside the contract delivery window."

"For the wheat tender ... in which SAGO announced the results today, the three origins offered by the bidders were as SAGO reported: EU, Black Sea, North and South America excluding Canada."

"The supplier only confirms the origin of the grain to SAGO at time of loading vessel and origin nomination prior to shipment."

Traders also said they believed a substantial proportion of the wheat would be sourced from the Black Sea region, but that some would still be sourced from Saudi Arabia's traditional suppliers in the EU.

"I would guess that up to 60% of the purchase today could be sourced from the Black Sea region and about 40% from the north EU including Germany, Poland and the Baltic States," one trader said.

Another trader added: "Russian prices look high in this wheat category and it is challenging, but not impossible for Russian wheat to meet the Saudi standards."

"It looks like the Black Sea will get a good slice of the business but not all of it."

(Reporting by Asma Alsharif; additional reporting by Michael Hogan and Maha El Dahan, Editing by Louise Heavens and David Evans) ((asma.alsharif@thomsonreuters.com; +20225783290; Reuters Messaging: asma.alsharif.reuters.com@reuters.net))

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