Egypt, the world’s largest wheat buyer, has re-entered the global market with its largest purchase in nearly three years. Egypt’s General Authority for Supply Commodities bought 535,000 metric tons of Ukrainian, Russia, French, and Romanian wheat at an average price of $317 per tons. Egypt’s infrequent purchases over the past years has been the result of political upheaval and has been a major reason why wheat was one of the worst performing commodities of 2013 – dropping 18% over the year. At the same time as Egypt’s purchase, Algeria also purchased between 500,000 – 550,000 tons of wheat. The combined purchases of over 1 million tons have pushed up global wheat prices. Continued steady purchases from Egypt are expected as the county cannot afford further public strife caused by food shortages, and prices are currently low enough to drive increased demand. Analysts believe that if Iran should also continue purchases after its return to international markets in approximately two years, global wheat prices could rise even further.
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