RIYADH: Saudi Arabia’s state grains authority has bought 440,000 tons of wheat at an average SR960 ($256.2) per ton, a senior authority official said on Monday. The origin of the wheat has not been disclosed.
The Grain Silos and Flour Mills Organization (GSFMO) bought a total of eight cargos, five of which are to be unloaded at Jeddah port and three at the eastern port of Dammam, the official said.
Six of the cargos contained wheat with a 14 percent protein content which was purchased at $261.83 per ton c&f. The two other cargos contained 12.5 percent protein wheat which was bought at $242 per ton c&f.
GSFMO awarded four of the cargos to Bunge SA, three to Toepfer International and one to Nobel Resources, he added. The wheat was for delivery in March and June.
European traders said they believed European Union and possibly some Russian wheat would largely be delivered for the Saudi purchase.
“US and Canadian wheat is currently too expensive,” one trader said. “US wheat was up to $20 to $22 a ton more expensive than EU in fob terms and freight shipping costs from the US are about $15 to $18 a ton higher than from Europe.”
“This is too large a difference to overcome.”
Canadian wheat was offered more aggressively at about $15 to $20 cheaper than the US but the Canadian freight disadvantage was also too large.
Some of the 12.5 protein wheat could be sourced from Russia but EU supplies of 14.5 protein wheat were cheaper than Russian, traders added.
