Algeria continues to impact European wheat prices, which rose for the second consecutive session on Tuesday January 26th. These prices are driven by the consequent sale of American corn to China and supported by the prospect of a new purchase from Algeria, Reuters reported on Thursday.
The wheat price for the month of March on Euronext thus stood at 229.75 euros ($ 279.24) per tonne, up 1.4% from its price the day before. European wheat has thus recovered most of its losses recorded last Friday, when prices fell by 4%.
The prospect of a call for tenders organized on Wednesday by the Algerian Interprofessional Cereals Office (OAIC), the European Union’s largest wheat buyer, helped support European prices.
“We have seen that the brief price correction has brought Algeria back to the market,” said a French trader. “There is a potential for more buying interest,” he further said.
Wheats originating in the EU, notably French, German and Polish wheat, are considered well suited to constitute a part of any purchase of this cereal by Algeria, along with Argentine wheat.
European wheat prices have also been supported by the announcement by the US Department of Agriculture of an export of corn of around 1.36 million tonnes to China. Comments from US grain group Archer Daniels Midland notably highlighted increased demand thanks to major Chinese purchases of US corn-based ethanol.
At the end of December, the price of European wheat had also increased by 0.5%, following a call for tenders launched by Algeria.
The United States Department of Agriculture (USDA) has estimated Algeria’s wheat consumption for the 2020/2021 season between 10.7 and 11 million tonnes, for a local production of nearly 3.75 million tonnes, down 5% from production for the 2019-2020 season.
Algeria could import between 5 and 8 million tonnes of wheat this season to meet its needs, which are covered at 34 to 36% by national production, according to the USDA.
