The world's largest wheat importer Egypt is currently considering changes to its purchasing conditions. It is believed that the country on the Nile wants to increase its strategic grain reserves. Sellers should not take any risks in the event of any export restrictions.
Egypt's President Abdel Fattah al-Sisi last week urged his authorities to increase government reserves as a result of fears of food reserves during the corona pandemic.
Yesterday, the state-owned grain purchaser in Egypt, GASC, asked suppliers to state their offers in the future as "cost and freight" (c & f) prices instead of "free-on-board" (fob) as before.
For the providers, a c & f price is an advantage because it gives you more control over the load. With a fob price, the seller would also have to show the GASC the freight costs separately.
The GASC now intends to pay for the grain it has purchased when certain documents such as a bank guarantee and various loading documents are available (at sight). So far, Egypt had always paid late.
The Islamic Trade and Finance Cooperative guarantees and makes the payment.The GASC had only recently joined this organization.
Last Friday, the Cairo cabinet determined that strategic grain reserves were still available for four months. The grain harvest also begins there in mid-April.
Last Wednesday the GASC issued a tender for the purchase of wheat and canceled it immediately afterwards. However, retailers are expecting a new invitation to tender on modified terms shortly.
The cancellation of the first tender is based on the fact that the seller should be obliged to deliver the wheat from a different origin if the intended first country of origin restricts or completely prohibits export due to the Corona crisis. In this case, the providers would then also have to bear all costs incurred to date. International providers refused.
Source
Hansa Terminhandel GmbH
