June 21, 2011

Egypt to determine resumption of Russian wheat imports in August

Egypt will wait until Russia's harvest begins in August to decide whether to resume purchase of wheat.

Yields, prices and a proposed duty on Russian grain exports will govern the decision by the General Authority for Supply Commodities, Egypt's state wheat buyer, Vice Chairman Nomani Nomani said.

Russia, which supplied Egypt with more than half of its imported wheat in the marketing year through June 2010, barred all cereal exports last August as a drought seared fields. The ban will expire as scheduled on July 1, Russia's government said last month.

"We have been getting the best types of wheat from Russia last year and the year before," Nomani said. "Were it not for the emergency last year, we would have continued to deal with the Russians. However, last year the Russians failed to ship some quantities that were agreed upon even before the ban came into effect, and that is why I am wary of the Russian side."

Wheat shipments totalling 690,000 tonnes, including 210,000 tonnes with delivery dates before the ban took effect, never reached Egypt last year, according to Nomani. The measure prompted Egypt to drop Russia from the list of countries approved as sources of imported wheat.

"When we are sure that the Russian side is stable, we will re-include it in the official list of origin countries," Nomani said. "We do not encourage purchases from one origin country or another. Our aim is diversification of origins."

The authority buys between five million and six million tonnes of wheat a year on behalf of the government via international tenders because local production is too low to meet demand.