August 11, 2010

Russia reviews Egyptian requests on deferring wheat delivery

Russia is studying the Egyptian requests to reschedule delivery of 540,000 tonnes of wheat Egypt had purchased before Russia's announcement of its temporary ban on grain exports.

The Russian government is keen on the strategic relations between the two countries and the Russian side is mulling rescheduling of the wheat delivery to Egypt, Russia's First Deputy Prime Minister Viktor Zubkov said.

"By the first of October Russia will review the harvest situation as the image would be clearer then," he said, adding that he supported the idea of forming a technical Egyptian-Russian committee to follow up the plan of rescheduling.

On Sunday (Aug 8), Egyptian Minister of Trade and Industry Rashid Mohamed Rashid met with the Russian charge d'affaires in Cairo and handed him a message to the Russian minister of trade on amending the contracts signed by Egypt's General Authority for Supply Commodities (GASC) and Russian companies ahead of the exportation ban.

GASC has signed contracts for the purchase of 540,000 tonnes of wheat from Russia for delivery between August 1 and September 10.

Russian Prime Minister Vladimir Putin announced Thursday that his country would impose a temporary ban on grain exports due to hot weather and drought, driving the benchmark wheat futures to a 23-month high in global markets.

Egypt is the world's largest wheat importer and it currently purchases an average of eight million tonnes of wheat annually for the production of subsidised bread.

An average of two to three million tonnes of wheat are purchased from domestic market while another five to six million are imported from abroad, the Ministry of Trade and Industry said.

In the fiscal year 2009-2010, which ended in June, Russia was the biggest wheat exporter to Egypt with a 59% share of the latter's imports. France ranked the second with 27% and the US the third with 7%. The rest are purchased from other trade partners.