Algeria Wins Big with 600,000 Ton Milling Wheat Purchase in Global Tender

Algeria has made a significant move in the global grain market by purchasing 600,000 metric tons of milling wheat. The transaction was confirmed after an international tender closed on October 22, 2023.

Details of the Wheat Purchase

The purchase, conducted by Algeria’s state grains agency, OAIC, aligns with earlier trader estimates that ranged between 500,000 and 600,000 tons. By October 23, estimates coalesced around the 600,000-ton figure, although some traders reported slightly lower numbers, around 580,000 tons.

Pricing and Sourcing

The total cost for this transaction stood at US$258.50 per ton, which includes shipping costs. Most analysts anticipate that the wheat will primarily be sourced from the Black Sea region, with potential suppliers including:

• Romania
• Bulgaria
• Ukraine

While Argentine wheat was discussed as a possible source due to its competitive pricing, the shipment timelines may not align with Argentina’s new crop, making it less feasible for this tender.

Shipment Schedule

Wheat shipments are scheduled in two main periods: from December 1–15 and December 16–31. Shipments from South America or Australia, however, are anticipated to occur a month earlier, set for November 1–15 and November 16–30.

Impact of Diplomatic Relations

Interestingly, French wheat, which has historically played a significant role in Algeria’s imports, was notably absent from this tender. Analysts speculate this may be a result of ongoing diplomatic tensions between Algeria and France, particularly following France’s recognition of Morocco’s sovereignty over Western Sahara.

Recent reports suggest that OAIC has increasingly excluded French wheat and companies from import tenders, despite the agency claiming to treat all suppliers fairly. Some traders pointed out that French wheat could have been supplied at the same price, given that prices for French, Russian, Romanian, and Ukrainian wheat are closely aligned, ranging from US$226 to US$229 per ton free on board (FOB).

As the situation develops, additional price estimates and volume projections are expected to emerge from trader assessments.