2024-08-13 14:42:57
Egypt’s efforts to take advantage of falling prices to buy large quantities of wheat have been stymied by unattractive payment terms, leading to smaller purchases and higher-than-expected costs, traders said on Tuesday.
The Egyptian government’s General Authority for Grain Buyers and Supplies Commodities attempted to take advantage of wheat prices falling to their lowest levels in nearly four years, announcing the largest-ever procurement operation with a target of 3.8 million tons.
However, traders said the 270-day delay in payment of wheat prices resulted in reduced quotations and purchases.
The General Authority for Commodity Supplies usually issues regular practices, but on Monday it aimed to meet Egypt’s wheat needs from October to April in one go.
This practice received more than a hundred offers, but at higher prices as shipping prices ranged from $244 to $350 per ton, which traders said was much higher than the market price.
Egypt is one of the world’s largest importers of wheat and its main goal is to provide subsidized bread to tens of millions of citizens.
The Commodity Supply Authority alone imports about 5.5 million tons of wheat every year to support bread.
Egypt usually imports most of its grain requirements from Russia, which accounted for nearly 70% of its total wheat imports in 2023.
“It’s a very strange approach,” one dealer said when the offer was launched about a week ago.
“We usually submit shipping quotes one or two months in advance. It’s very difficult to submit shipping quotes six to seven months in advance,” he added.
Another trader said paying within 270 days was annoying.
“I doubt they’ll get the full amount,” he explained.
The Directorate General of Commodities Supplies said the aim is to maintain strategic stocks sufficient to meet nine months of demand.
As of July, Egypt’s strategic wheat reserves were estimated to be enough to sustain demand for 6.9 months.
1723565353
#Smaller #size #higher #cost…Why #Egypt #buy #maximum #amount #wheat
