In the US, on Wednesday, March 2, May contracts for wheat jumped 7.6% to $10.59 per bushel ($367 per ton). In mid-February, the price was slightly above $7.7. The reason is the war in Ukraine and the related problems of grain shipment from the Black Sea ports.
Experts noted that Russia and Ukraine provide 30% of world wheat exports, so even their temporary withdrawal from the market will lead to further price increases. In this regard, the UN Food Organization warned of the risk of conflicts in the Middle East and North Africa, since these countries are the main buyers of wheat from the Black Sea region.
Egypt has already canceled one of the auctions for the purchase of grain, since there were only two offers, and both are very expensive.
“The Egyptian state-owned company GASC held another tender for the purchase of wheat this week. The Egyptians received two offers from France at a price of $429-438/t and one, after a long break, from the US at a price of $517 (С&F). GASC has canceled the tender,” Andrey Sizov, head of the SovEcon analytical center, said.
At the same time, the Russian grain market has practically stopped. Imposed sanctions on banks and difficulties with logistics have lowered the demand for Russian grain to almost zero. Small sales go only to Kazakhstan. In addition to the minimum demand, the devaluation of the ruble added to the problems for Russian grain growers - they cannot understand the price of grain in the current conditions.
As for Kazakhstan, the country's traders are calculating new routes to Egypt - through the Caspian Sea and Azerbaijan, to Novorossiysk or to Georgian seaports.
Moreover, the Islamic Organization for Food Security (IOFS) applied to the KazGrain Grain Exporters Union with a request to compile a list of companies interested in wheat supplies to Egypt.
“IOFS received a request from the Embassy of the Arab Republic of Egypt in the Republic of Kazakhstan about the possibility of supplying 500,000 tons of wheat from Kazakhstan. In this regard, we ask you to send data on potential terms of delivery, including price and technical characteristics,” the letter says.
At the moment, traders are studying the offer.