Egypt: Ever Art crosses Suez Canal on its first voyage    IFC loans Egypt's El Sewedy $150 million for more access to renewable energy in Africa    Gold prices in Egypt on June 29    Saudi citizens could enter Schengen countries visa-free    Egypt's Petrojet returns to Libyan oil sector after 11 years    Cemex, VeryNile sign deal for Egypt's Nile River    NATO remarks Egypt's role in maintaining stability in Middle East and Africa    Congo needs Egypt's expertise to diversify its economy – FPI official    Dostarlimab drug cures rectal cancer patient 100%, trials show    Egypt: A royal train turns into a new tourism attraction    Conclusions and Recommendations of the 1st edition of Africa Health ExCon    For the first time John Legend to perform in Egypt    Egypt discovers newly treasure trove of ancient artifacts at Saqqara Necropolis    Noura Al-Mutair – first Gulf female boxer in World Championships    Liverpool fans: "You'll Never Walk Alone" to Cristiano Ronaldo    Egypt to play key role in integrating water, climate issues globally – World Bank official    Egypt's telecoms regulator announces working hours for holy month of Ramadan    Maha karara joins AAIB as Head of Corporate Communications, Sustainability    Egypt works on charting cooperation strategies with international institutions for 5 years: Al-Mashat    Over 2.4 million newborns examined for hearing impairment: Health Ministry    Netflix releases trailer of Arab adaption of 'Perfect Strangers' film    Balqees to headline concert celebrating launch of streaming giant LIVENow in MENA    Sawsan Badr to be honoured at Aswan Women Film Festival    MP Abdel Hady Al-Qasby calls government to facilitate and support NGOs    Al-Sisi follows up on 'Great Transfiguration Project' in St. Catherine    Cairo, London stress need to strengthen cooperation to face climate change    Foreigners account for 22.6% of Egypt's T-bills issuances in 1H 2021: CBE    Egypt's ambassador to Italy passes away    Egypt confirms readiness to help African countries face terrorism and extremism    An estimated 235 million people needed humanitarian assistance and protection in 2021, an increase of 40% compared to 2020: IOM Egypt    Egypt, DRC discuss water cooperation during WYF    Egypt, DR Congo discuss boosting bilateral cooperation during WYF    Cameroonian police probe assault on three Algerian journalists covering AFCON    Pharaohs start AFCON 2021 campaign with fierce clash against Nigeria    Foreign Ministry opens capacity building course for French-speaking African diplomats    Egypt's trade with Nile basin countries climbs 26% y-o-y in 9 months    Russia says it's in sync with US, China, Pakistan on Taliban    It's a bit frustrating to draw at home: Real Madrid keeper after Villarreal game    Shoukry reviews with Guterres Egypt's efforts to achieve SDGs, promote human rights    Sudan says countries must cooperate on vaccines    Johnson & Johnson: Second shot boosts antibodies and protection against COVID-19    Egypt to tax bloggers, YouTubers    Egypt's FM asserts importance of stability in Libya, holding elections as scheduled    We mustn't lose touch: Muller after Bayern win in Bundesliga    Egypt records 36 new deaths from Covid-19, highest since mid June    Egypt sells $3 bln US-dollar dominated eurobonds    Gamal Hanafy's ceramic exhibition at Gezira Arts Centre is a must go    Italian Institute Director Davide Scalmani presents activities of the Cairo Institute for ITALIANA.IT platform    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Black Sea wheat tightens grip on Egypt imports
Published in Daily News Egypt on 26 - 02 - 2010

CAIRO/PARIS: Russia is reinforcing its lead in wheat shipments to Egypt and its grain export push may be emulated by other Black Sea producers, further squeezing US and European sales to the world s top wheat importer.
Russia is pressing ahead with investment in grain infrastructure, including a new terminal at the Black Sea port of Tuapse, that could increase its price advantage and may help the country overtake Europe as the world s second largest wheat exporter after the US
After a brief hiccup in sales to Egypt last year in a row over quality of certain cargoes, Russian wheat quickly resumed its dominant position of recent years in supplying the North African country.
While other longstanding suppliers like France and the United States are unlikely to disappear from Egypt s tenders, with state buyer GASC intent on maintaining stiff competition, they could be confined to a fringe role in the face of cheaper Russian wheat and freight prices, analysts and traders said.
It s not that they (Egypt) favor the Russian wheat, said James Dunsterville at Geneva-based Agrinews. They would just buy the cheapest wheat under the tender terms and over the last two years Russian wheat has been the most competitive to Egypt.
Since the start of the current financial year in July 2009, Egyptian state s main wheat buying agency General Authority for Supply Commodities (GASC) has purchased 4.75 million tons of wheat.
More than 55 percent was from Russia while the market share for France and the US was 28.4 percent and 8.6 percent.
Russian shipments have benefited in the short term from a new rule imposed by Egypt that requires suppliers to load 60,000-ton shipments at a single port. This has hurt French exports by effectively ruling out their main grain terminal at Rouen, which is too shallow to fully load such volumes.
The changes to Egypt s tender criteria have reinforced the dominance, you could even say the stranglehold of Russia on this market, said one French exporter who sells to Egypt.
The world s no.2
Part of Russia s attractiveness to GASC has been its competitive freight rates, due to the proximity of the Black Sea to Egypt, giving it an advantage of $10 a ton over US shipments and a couple of dollars versus French cargoes.
This freight edge will be reinforced with the new terminal at Tuapse and upgrades to shallower ports like Rostov and Taganrog, together boosting Russia s export capacity by 5 million tons to 30 million tons this year.
Russia accounts for over half of the sales to GASC in the current fiscal year, after raising its exports to both GASC and private buyers to 4.9 million tons in the 2008/2009 crop year from 3.36 million tons in the year before.
US wheat has been the main victim of resurgent Russian exports, registering zero sales to GASC since early September. French wheat has still managed to keep nearly a quarter of sales.
Increased trade with Egypt forms part of Russia s ongoing expansion of its grain exports, which could get an extra boost from plans to offer subsidies to export up to 3 million tons of wheat from Russian intervention stores.
Michel Ferret, head of the markets service at France s farm office FranceAgriMer, said Russia was forecast to surpass the United States as a wheat producer in 2010 for the first time, and could soon overtake the European Union as the world s No. 2 exporter of the grain behind the United States.
Low cost producers
European and US exports may face another headache in the emergence of other Black Sea countries as suppliers to Egypt.
Black Sea are the low cost producers so there will be continued pressure on traditional exporters to maintain market share when you re talking about GASC who buys predominantly on price, said Luke Chandler, director, agri commodity markets research at Rabobank International in London.
Kazakhstan recently secured a first sale to GASC since 2008 while state company KazAgro said last month the country would export up to 1.5 million tons of grain this year to Egypt in a deal with private firm Venus International.
The oil-producing central Asian country was aiming to overcome its freight handicap towards major export markets by subsidizing the transport of local wheat.
Ukraine, currently not sought by GASC tenders because of persistent problems of bug damage, was another potential challenger in Egypt if it could boost its quality, traders said.
With Russian wheat, Kazakh wheat and in future Ukrainian wheat as well, we might have to write off this destination (Egypt) in the medium term, the French exporter said.
Nevertheless, GASC is expected to continue encouraging a range of origins to keep competition high and avoid depending wholly on Black Sea origins, which bring supply risks.
Traditionally severe weather in the Black Sea region periodically can disrupt crops and logistics, while transport remains problematic across the vast Russian territory.
The main risk is presented by very high logistic expenses like railway fees, said Andrei Sizov, the chief executive of SovEcon agricultural analysts. If competitors are in a position to lower price, shipments of quality wheat shipments (to Black Sea ports) from Siberia may halt. -Additional reporting by Gus Trompiz in Paris, Karl Plume in Chicago and Aleksandras Budrys in Moscow


Clic here to read the story from its source.