Mena importers make rare LatAm wheat purchases

Importers from the Middle East and north Africa (Mena) region made rare wheat purchases from Brazil and Argentina in recent weeks, as scarce and costlier supply from Europe and the Black Sea this year have pushed buyers to seek alternatives.

Turkey was heard to book at least two milling wheat cargoes from Argentina last week in a range of $352-358/t cfr for January shipment, traders said. This would be Turkey's first purchase of crop from Argentina since at least the 2011-12 marketing year, customs data show.

And Egypt last month was reported to secure Brazilian wheat cargoes for December and January shipment in a range of $344-348/t cfr. This marks Egypt's first official purchase of Brazilian wheat since 2012-13 when it imported 155,000t from the origin.

Morocco also turned to Brazilian wheat, securing a 12.5pc protein grade milling crop for shipment in the first half of January. The importer last year bought 45,000t of wheat from Brazil, which was a first since 2014-15.

Turkey this year has stepped up wheat imports, following a weak domestic harvest. The country's state-owned grains firm TMO last purchased 385,000t of red milling wheat for 10-31 January shipment on 25 November, with clearing prices rising from its last tender in October.

Egypt made a slow start to 2021-22 compared with a year earlier, but gradually stepped up imports in recent weeks. The country's state-owned grains buyer GASC purchased 600,000t of Black Sea wheat at the start of this week — its single largest purchase in many years.

But a rise in Turkish and Egyptian imports coincided with a rapid increase in wheat prices in Russia — Turkey's largest supplier — amid dwindling supply of crop globally and the Russian government's tax on grain exports. Global supply scarcity has also boosted wheat prices in Ukraine — Turkey's second-largest supplier of crop.

And Morocco has sought alternative origins this year, despite a good domestic output, as its largest supplier, France, harvested a smaller share of milling wheat compared with recent years.

In contrast, Argentina and Brazil are expected to step up exports this year amid a return of favourable weather conditions to the region. They are projected to export 13.5mn t and 1.3mn t of wheat this year, respectively, under US Department of Agriculture estimates, up from 11.2mn t and 925,000t last year.

By Bilal Muftuoglu