Algeria's state grains agency, the Office Algérien Interprofessionnel des Céréales (OAIC), has made a significant purchase of milling wheat in an international tender that concluded on Wednesday, May 14, according to European traders.

While the precise volume of the purchase remains somewhat unclear, initial reports from traders indicate a substantial acquisition, estimated to be between 600,000 and 700,000 metric tons. The reported purchase price is approximately $244.50 per metric ton, cost and freight (c&f) included. It is important to note that these figures are based on trader assessments, and further updates on the final prices and volumes may emerge later.

The tender, which nominally sought 50,000 metric tons, is characteristic of Algeria's purchasing practices. The OAIC frequently buys considerably more wheat than the initial volume specified in its tenders, reflecting the nation's significant demand for this essential commodity. Suppliers from various approved origins are eligible to provide the wheat.

The wheat acquired through this tender is intended for shipment during two primary periods from the main supply regions, including Europe: July 1-15 and July 16-31. For wheat sourced from South America or Australia, the shipment timeline is shifted forward by one month. This adjustment accounts for the longer transit times from these regions.

Algeria is a crucial market for wheat, particularly for exporters within the European Union, with France historically being a major supplier. However, the dynamics of Algeria's wheat imports have been evolving. Exporters from Russia and other Black Sea region countries have been increasingly active in the Algerian market, presenting strong competition.

A key factor influencing these shifts is the reported diplomatic tension between France and Algeria. Traders suggest that this tension has led the OAIC to effectively exclude French wheat and trading companies from its purchase tenders. The relationship between the two countries remains strained, impacting traditional trade flows. This has opened opportunities for other suppliers, particularly those from the Black Sea region, to expand their presence in the Algerian market.