Egypt haggles in the wheat market, manages to secure discounts

GASC, the world’s largest wheat trader, is flexing its muscles: Egypt’s haggling power in the global wheat market is back in full force, Bloomberg reports. The world is overloaded with wheat and Egypt, “bought 235,000 metric tons of wheat in a tender Thursday and managed to pay an average 82 cents a metric ton less than the offers it received, according to people involved in the process.” With last year’s ergot spat ended and confidence in Egypt restored, “the country has the upper hand as exporters from nations such as Russia scramble to offload record harvests.” Charles Clack, an analyst at Rabobank International explains: “There are still overwhelming exporter supplies kicking about in the global market and being the No. 1 importer, Egypt is well aware of their strong negotiating position. Traders need a buyer.” What Egypt’s General Authority for Supply Commodities (GASC) also did is announce it was now accepting US hard red winter wheat, which “may increase competition with top seller Russia, where exports have so far lagged expectations amid a stronger ruble. It may also prompt lower offers in the future from Romania and Argentina, which in last week’s tender sold to Egypt for the first time since February.”