October 21, 2011

  

Egypt perceives Russian wheat as competitive

 

 

According to Egypt's key state wheat buyer on Thursday (Oct 20), he was not experiencing any financing problems in spite of political uproar and although Russian wheat imports had been postponed, the country's wheat was still competitive.

 

According to Reuters, the vice-president of General Authority for Supply Commodities (GASC), Nomani Nomani, said, "I do not have a financing problem, as the state guarantees the financing for basic goods to the country so I do not feel I have any problems at all."

 

Egypt has been struggling with a ballooning budget deficit since a popular uprising toppled president Hosni Mubarak in February.

 

The world's largest wheat exporter spends heavily on its food subsidy programme, paying EGP33 billion (US$5.52 billion) in the fiscal year which ended in June, for subsidised commodities including wheat, sugar, oils and rice.

 

GASC heavily depends on Russia for the majority of its wheat imports.

 

Since the start of the 2011/12 fiscal year on July 1, GASC has purchased 2.34 million tonnes of Russian wheat, 180,000 tonnes of Romanian wheat and 120,000 tonnes of Kazakh wheat, according to data collected by Reuters.

 

Nomani said he had faced minor delays with some Russian wheat shipments but that he was compensated for those delays by the suppliers. He said that Russian wheat remained competitive despite the congestion in the Russian port of Novorossiisk.

 

"The difference in price between Russian and French origins is big. It is nearly US$18 a tonne based on prices of the last tender," he said.

 

Since ending a grain export ban on July 1, Russian wheat has dominated international purchase tenders with huge sales made to countries such as Egypt, Jordan and Iraq.

 

Traders have said this has led to a shortage of railway wagons to transport wheat to ports and caused delays of up to three weeks.

 

Russia's grain export ban had been imposed last year after a catastrophic draught. The country is considering imposing a duty on wheat exports in the current season if exports are too high, the government said on October 11.

 

"Export tariffs affect the offers that we get," Nomani said and asked that export tariffs not to be imposed.