September 14, 2022

Egypt state grains buyer approves replacement for detained Ukrainian wheat shipment

Egypt's General Authority for Supply Commodities (GASC) has agreed to decided to replace a detained Ukrainian wheat shipment with a new 60,000-tonne cargo from the same supplier, Olam, cost and freight price of US$361.25 per tonne, Reuters.

This follows weeks of talks to either free or replace the shipment.

According to two people with knowledge of the matter, that price was also set for the original 60,000-ton cargo. The new shipment is expected to be delivered between September 15 and October 15.

The original cargo was acquired by GASC in a December tender for shipment in February, but since Russia's invasion of Ukraine on February 24, it has been stuck on board a ship called Emmakris III at the port of Chornomorsk. In order to look into the ship's alleged Russian ownership, the prosecutor general of Ukraine requested its detention in July.

Ukraine's Middle East representative stated in August that the ship was being released by Ukrainian authorities.

Since the GASC tender book lacks a clause for force majeure, suppliers are required to fulfil contractual quantities from an alternative origin in the event that a cargo cannot be delivered.

GASC did, however, release suppliers of four Ukrainian wheat cargoes that were purchased prior to the war but were never loaded onto a vessel in July.

According to both individuals with knowledge of the situation, GASC terminated its agreement with GTCS, the shipper of the older cargo. One of them added that the new contract with Olam would absolve GASC of any further expenses as well as any liability for the earlier shipment.

Egypt's Supply Minister Ali Moselhy said the country's strategic wheat reserves currently stand at 6.6 months.

-      Reuters