The price obtained by Toepfer is the highest out of six auctions that the trader won in Egypt for Romanian wheat since the beginning of the season.
“The wheat acquisition on November 6 is this: 60,000 tons of Romanian wheat from Toepfer,” reads the public announcement made by the state-run buyer from Cairo, which mentions that the delivery is to be made between December 1 and December 10.
Through this auction Egypt, the world’s largest wheat importer, has returned to the international market of acquisitions after more than a month. The Egyptian authorities tested the market before in mid-October, but decided to cancel the orders because prices were too high.
This time Egypt has been cautious and only ordered one Panamax worth of wheat. Usually the Egyptian state buyer prefers to spread the risk by choosing wheat from different countries and the orders placed after one auction entail several 60,000-ton Panamax ships.
For Toepfer this is the sixth auction it won since the beginning of the season, i.e. in the past five months. This means during this period the company has secured contracts for 360,000 tons of Romanian wheat to be exported to Egypt.
The contracts between Toepfer and the Egyptian state mean revenues of EUR70 million for the US company, according to ZF calculations.
This season Egypt has ordered 2.2 million tons from the international market, 40% of which is Romanian wheat, while the rest is bought from Ukraine and Russia.
At the end of October the average price of wheat for bakery was EUR155 ($209 at the current exchange rate), according to the official statistics of the Romanian Agriculture Ministry.
If you compare acquisition prices on the Romanian market and export prices, the difference is $71, but this is not the profit margin because exports entail transportation and other operating costs. In general a trader gets a profit margin of $10-15 per ton at such an auction.
(English version by Daniela Stoican)