Three of the world's biggest wheat importers, Egypt, Algeria and Saudi Arabia all held tenders in the week ending Nov. 11 as volatility grew alongside uncertainty over Russia's willingness to obstruct exports from Ukraine's Black Sea ports.

The price of Black Sea wheat hit a 12-month low of $304/mt on Oct. 26 but had jumped $17/mt by Oct. 31 after Russia said shipowners could no longer count on the safety of vessels visiting Pivdennyi, Odessa and Chornomorsk, which together handled most of the country's pre-war grain exports.

Within two days, Russia had returned to the terms of the Black Sea Grain Initiative, the agreement that guaranteed the safety of grain and fertilizer shipments from those ports until Nov. 19.

Russia's short-lived withdrawal from the agreement was based on a complaint about its implementation. In the final days of October, grain traders had been preoccupied by delays to the inspection process for ships entering the ports, rather than the possibility that Russia might immediately stop all shipments.

The UN-brokered agreement was signed in mid-July, and it is now uncertain whether Russia will attempt to block an extension when the initial four-month period of protection ends on Nov. 19.

A direct block would likely trigger another spike in prices. Most traders consider that unlikely, but the risk has complicated the calculations for those wishing to take part in the tenders for Egypt, Algeria and Saudi Arabia.

In Egypt on Nov. 7, GASC received offers for a total of 1.35 million mt of wheat shipped in the second half of December or first half of January but rejected them all. Then on Nov. 11, traders said the company had bought 280,000 mt of Russian wheat outside the tender process for $363.5/mt CNF, more than $6/mt below the lowest offer in the tender. That was GASC's first purchase since Sept. 1.

In Algeria on Nov. 9, traders said OAIC booked around 510,000 mt of wheat for shipment in December at prices around $368/mt CFR Algeria. The company bought twice in October.

Saudi Arabia tendered Nov. 11 for 595,000 mt of milling wheat for April-June arrival, but the outcome wasn't immediately known. It last bought on Oct. 21.

The fear of greater price volatility in the weeks ahead may be one driver behind the timing of the three tenders. Egypt was also constrained by domestic economic concerns and a $3 billion loan that came through from the International Monetary Fund on Oct. 27.

In 2022, global grain prices have experienced their most volatile period in more than a decade. Prior to Russia's invasion of Ukraine, the two countries provided around a third of the wheat and corn that were traded globally.

Platts, part of S&P Global Commodity Insights, assessed Russian wheat with 12.5% protein, the region's most widely traded milling grade, at $318/mt on Nov. 10. That is around $130/mt less than the price of milling wheat in the Black Sea at the start of March, when Ukraine's Black Sea ports had just closed and trade finance options for Russia were closing up.