May 19, 2022

 

About 300,000 tonnes of wheat booked by Egypt stuck in Ukraine

 

 

Four traders said about 300,000 tonnes of wheat booked by Egypt's state grains buyer General Authority For Supply Commodities (GASC) for shipment in February and March have not been exported, with one cargo stuck at port and four other cargoes not loaded, Reuters reported.

 

GASC has granted an extension to secure the grain shipments but is not offering trading firms any force majeure release from contractual obligations.

 

Egypt, the world's top wheat importer, was reliant on Black Sea wheat imports, which were affected by Russia's invasion into Ukraine.

 

Egypt's prime minister announced last week that the country's remaining wheat stocks would last four months. Traders claim that any wheat purchased, even if not yet delivered, is regarded as part of the country's strategic reserves. Last year, GASC bought 4.7 million tonnes of wheat.

 

Traders said two of the unloaded shipments were contracted by Nibulon, while Inerco had contracted two more. A fifth cargo contracted by Olam's is stuck in Ukraine's Chornomorsk port.

 

Authorities had given an extension for delivery of the cargoes, Egypt's supply minister acknowledged on Sunday, adding that they were in negotiations with suppliers about getting the four shipments to Poland by rail.

 

Three traders with knowledge of the situation said GASC was requesting the delivery of the four emptied wheat cargoes, if required from other origins, notwithstanding a stop in shipments of Ukrainian wheat exports caused by the conflict.

 

Although the Grain and Free Trade Association (GAFTA), an international trade group, might arbitrate such circumstances,

 

GASC's tender book has no provision for force majeure, but one trader said the Grain and Free Trade Association (GAFTA), an international trade group, might arbitrate in such circumstances.

 

Ukraine has been compelled to export grains across its western border, depending on limited train capacity and small Danube river ports, due to Russia's invasion blocking its ports.

 

Since the beginning of Russia's invasion into Ukraine, GASC has only bought foreign wheat once, from France in April at a higher price than it had paid before.

 

-      Reuters