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Egyptian wheat rules no obstacle to Russia -trade

Published 11/25/2009, 12:32 PM
Updated 11/25/2009, 12:36 PM

* Egypt is largest buyer of Russian wheat

* Russia has enough quality wheat to meet demand - trade

* Wheat can be loaded at Novorossiisk port

* Russia successful at latest Egyptian tender

* Supplies only slightly down from last year

By Aleksandras Budrys

MOSCOW, Nov 25 (Reuters) - Russia will find enough quality wheat at the right price to meet tough new import terms introduced this year by Egypt, its largest export market, after a row over grain quality, Russian traders and analysts said.

Russia has exported 1.8 million tonnes of wheat to Egypt since the start of the current season in July, only slightly less than a year ago, a senior trader with a major Russian grain exporter told Reuters on Wednesday.

"We have sufficient grain and we have the conditions to meet the Egyptian requirements," the trader said. "Quality is not an issue if prices are acceptable."

Major wheat consumer Egypt, reliant on imports for about half of its needs, became embroiled in the row over grain quality after an investigation was ordered into Russian wheat imported by an Egyptian firm in May.

Tougher import terms have snarled cargoes into Egypt and led to higher freight charges, though Trade Minister Rachid Mohamed Rachid said on Nov. 20 the government had no plans to add new conditions to its quality-control measures.

Changes have included a requirement for 55,000-60,000-tonne cargoes only, rather than 30,000-tonne ships often seen from Russia, and for consignments to be loaded only at one port.

Egypt has also demanded wheat with bug content of up to 1 percent. Russian market participants said on Wednesday this would not pose a problem.

"If Russia is offered a good price, it can find sufficient wheat, even with bug content of 0.5 percent and less," Vitaly Smirnov, an operations manager at the Russian unit of the Inspectorate commodity inspection company, told Reuters.

TENDER SUCCESS

Egyptian demand for Russian wheat was borne out at the latest tender on Wednesday by government wheat buyer GASC.

GASC, the General Authority for Supply Commodities, bought 240,000 tonnes of Russian wheat from four separate traders at its latest tender, all at $198.75 per tonne.

French grain trader Granit said this month that it expected Russian stocks of wheat with 1 percent bug content to be scarce and inspection group SGS said that Black Sea wheat quality this year was quite low.

"In fact, wheat quality this year is higher than last year," said Andrei Sizov Sr., chief executive of leading Russian agricultural analysts SovEcon.

"Although there may not be sufficient quality grain in the south of Russia, it may be found in western Siberia," he said.

Sizov said the new Egyptian terms were actually favourable to Russia, which could load the required volumes at its Black Sea port of Novorossiisk, while ruling out France's top grain port, Rouen.

"The Germans could benefit, as they have sufficient grain of the necessary quality this year and their Baltic sea freight rates are quite low," Sizov said. (Editing by Anthony Barker) ((aleksandras.budrys@reuters.com; +7 495 775 1242; Reuters Messaging: aleksandras.budrys.reuters.com@reuters.net))

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