Algeria buys 400,000 tonnes of milling wheat

Algeria's state grains agency OAIC bought around 400,000 tonnes of milling wheat this week, a deal in which usual supplier France is expected to miss out due to harvest quality problems, European traders said. Algeria, one of the world's largest wheat importers, paid $254.50 a tonne, including cost and freight, for the wheat, which is to be shipped in the second half of December and in January, traders said.
In a sign of the impact of a rain-soaked harvest on French export prospects, traders said the wheat booked by Algeria would likely come from northern European and Baltic Sea countries rather than France. The wheat could come from countries including Germany, Poland, Sweden, Finland and possibly Britain, traders said. The origin of wheat in Algeria's import tenders is at the seller's option, so the source of the grain is not certain until it is shipped. But prices and availability of suitable wheat quality in supplier countries give a good indication.
France, which exported 5.7 million tonnes of wheat to Algeria in the 2013/14 season to June 30, is facing a drop in crop quality that could leave much of its production below the requirements of overseas clients. The OAIC warned traders in August it will reject cargoes containing wheat mixed from different origins after news that France had imported wheat to improve the quality of contracts signed before the rain-affected harvest.
Traders said offers of French wheat were made in this week's Algerian tender but did not meet OAIC's tender terms. The tender also drew offers of Russian and Ukrainian wheat that again failed to meet the tender terms. Algeria has traditionally refused wheat from the Black Sea exporters, citing levels of bug damage.
Traders said the apparent rejection of offers of French, Russian and Ukrainian wheat, which were cheaper than the final sale price, showed Algeria was not ready to reduce its quality demands to take advantage of lower prices. In 2007, OAIC lowered some quality requirements because of the low availability of milling wheat both in France and worldwide and because of very high prices.