The two contacts will generate about $40.7 million (EUR31.7 million) in revenue for the Swiss-held trader, which is more than one quarter of its 2011 revenue of EUR114 million.
Ameropa is to supply Egypt with 60,000 tons of Romanian wheat, according to the contract won at the end of October. The trader had previously won a contract for a similar amount at the end of September.
The contracts Ameropa signed show that despite a poor harvest this year due to the drought, Romanian wheat remains competitive on international markets. This is also because of the record 2011, which drove up the stock of wheat.
The Northern African markets are like a magnet for the major traders, which benefit from both access to the Black Sea and surplus available in Romania, Ukraine and Russia, as well as relatively low shipping cots.
Egypt is the most important market in Northern Africa and world’s biggest wheat importer, which buys about 10 million tons a year. This translates into EUR2 billion worth of wheat contracts a year, according to ZF’s calculations.
Winning a contract to sell wheat to Egypt is a very lucrative business for a trader, because the profit margins can be much higher than those it makes from selling wheat to processors or to other countries in the EU.
For instance, the contract Ameropa won at the end of September entailed delivery of 60,000 tons of wheat at $324/ton, in addition to $10.5 per ton in shipping fee. The average wheat price in Romania at the time stood at 1,100 lei/ton ($314), according to Agriculture Ministry data, about $10 lower than what Egypt offered to pay. This means $0.6 million additional profit for the trader.
The gap between prices offered by Egypt and those in Romania is even wider for the contract won at the end of October. Ameropa agreed to supply 60,000 tons of wheat at $355.8/ton plus $10.7/ton for shipping. The Romanian average price was RON1,080/ton ($300). Therefore Egypt pays $50 more, which translates into $3 million more profit for the trader, according to ZF’s calculations.
Ameropa’s rivals in Romania include Cargill, Alfred Toepfer and Glencore.
(English version by Loredana Fratila-Cristescu)