October 9, 2003



Egypt Interested in India & Pakistan Wheat; Australia Push Wheat Sales to Egypt


Egyptian officials are visiting India and Pakistan this month to look into wheat buying prospects, but the South Asian suppliers are not optimistic deals could begin then as Australia is pushing hard for sales.


The South Asian nations have been struggling for the past six months to sell to one of world's largest buyers - which has an annual requirement of up to 7m tons of wheat - despite getting a stamp of approval from Egypt on quality. But a planned visit by Egypt's Supply and Internal Trade Minister Hassan Khidr to Pakistan and a visit to India by an Egyptian delegation have again raised hopes that Egypt may be serious about purchases from South Asia.


Grain trade officials said that, with the Australian wheat crop expected to bounce back from last year's drought-decimated levels of 9.4 million tonnes, the prospect for Indian and Pakistani sales looked all the more bleak.


"Egypt is a good wheat buyer but their inspection levels are very stringent, said Gagan Gulati, an Indian grains exporter.


"That can cause a problem with our quality specifications. Government-to-government deal is also a bright possibility." Traders said that unless New Delhi was ready to commit big quantities for exports, Egyptian buyers would be a bit hesitant to step in for Indian supplies.


Last week, Australia won a lucrative Egyptian tender for 180,000 tons of wheat. This reminded the United States of the stiff challenge and pushed CBOT prices down. The deal was sealed at $143.20 a tonne FOB. "The price of Australian wheat is at par with Indian wheat but their quality is much superior," said one Indian trader. "In order to push Indian wheat, we need to discount our wheat by $10-$15 a tonne."


Pakistani government officials said it was too early to say if sales to Egypt would materialise after the delegation's visit.


"Our exports will depend on the new crop size," said Fahim Akhtar Khan, managing director of Pakistan Agricultural Storage and Services Corporation Limited. "We will look at the domestic availability situation first."


Pakistan exported 1.7m tons in 2002-03 (July/June). It halted its export programme in May after dry winds slashed crop yields. Private traders are allowed to export but the government has withdrawn rebates, making shipments unattractive.


Peter McBride, a spokesman for Australia's monopoly wheat exporter, AWB Ltd, said Egypt could buy wheat from India and Pakistan. "I am not talking about Egypt, but a lot of other countries buy wheat from Australia and mix it with lower quality wheat from India and Pakistan for blending," McBride told Reuters.


He also revealed that Australia was expecting more sales to the Middle East buyer as Australia's crop was projected to be good. "Egypt is a valuable market for us. We can go over a million tonnes - in an average we export around a million tonnes annually," McBride said. He added with Australia expected to harvest a wheat crop of around 22-24 million tonnes in 2003-04, exports could bounce back to around 16 million tonnes from around 5-6 million tonnes.

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