Traders said on Tuesday that Egypt’s efforts to buy large quantities of wheat, to take advantage of the decline in prices, were hampered by unattractive payment terms, which led to purchases of smaller quantities, and at cost more than expected.
The General Authority for Supply Commodities, Egypt’s government grain buyer, sought to take advantage of the fall in wheat prices to their lowest levels in nearly 4 years, to use largest ever announced, with the aim of buying 3.8 million tonnes.
However, traders said that the situation of delaying the payment of the wheat price for a period of 270 days has led to a reduction in offers and the quantity purchased.
The General Authority for Supply Products usually issues customs from time to time, but on Monday, it aimed to cover Egypt’s wheat needs from October to April in one go.
The practice received more than a hundred offers, but at higher prices, as shipping prices were between 244 and 350 dollars per ton, which traders say are much higher than market prices.
Egypt is one of the largest importers of wheat in the world, with the main goal of providing subsidized bread to tens of millions of citizens.
The Supply Commodity Authority alone imports around 5.5 million tonnes of wheat each year to support bread.
Egypt usually imports most of its grain needs from Russia, which represented nearly 70 percent of total wheat imports in 2023.
When the offer was launched about a week ago, one of the sellers said, “This is a very strange practice.”
“Usually we submit shipping offers a month or two in advance. It would be very difficult to submit a shipping offer six or seven months in advance,” he said.
Another trader said that payment within 270 days is difficult.
“I doubt they will be able to get the full amount,” he explained.
The General Authority for Supply Products said it aims to maintain strategic stocks sufficient to meet demand for nine months.
As of July, Egypt’s strategic wheat reserves were estimated to be sufficient for 6.9 months.
2024-08-13 14:42:57
#Smaller #quantity #higher #cost. #didnt #Egypt #buy #maximum #amount #wheat
