Wheat Stocks Plunge as Black Sea Disruptions Send Prices Soaring

Egypt's private wheat importers are facing a pressing issue as their stocks dwindle to just one month's worth. According to UkrAgroConsult, they have around 500 thousand tons of wheat left, which is insufficient to cover demand for an extended period.

The escalating tensions in the Black Sea and disruptions to grain shipments are contributing to the shortage. As a result, the price of 12.5% wheat CIF East Med for Egypt has skyrocketed to a record $301 per ton. Buyers are bidding around $300 per ton for optional-origin wheat, while sellers are offering it at $305-$306 per ton.

The scarcity of supplies is further complicated by the increasing costs of freight. Vessels calling at Ukrainian and Russian ports have become riskier due to tensions in the region, leading to a surge in prices. To mitigate this, some imports are being redirected through the Baltic, where freight costs exceed $40 per ton.

However, even if European supplies can be secured quickly, there's a catch - Romania and Bulgaria are facing quality issues with their wheat crop for the second consecutive year. Market participants estimate that over 50% of the crop is feed-grade, while supplies of 12.5% protein wheat remain limited.