December 1, 2022

 

Egypt can make international wheat purchases through new exchange

Ibrahim Ashmawy, Egypt's Deputy Supply Minister and chairman of the country's General Authority for Supply Commodities (GASC), said the GASC will be able to make international wheat purchases through a newly-launched exchange aimed at eliminating distortions in local prices, Hellenic Shipping News reported.

 

GASC, Egypt's state grains buyer, recently chose to purchase directly from suppliers worldwide for more competitive offers, instead of its traditional tender system.

 

Ashmawy said GASC can also buy from local farmers through the exchange, adding that GASC can be a buyer and seller on the exchange.

 

GASC had requested that all international suppliers register at the bourse by November, but traders claimed that it was unclear whether this requirement applied to the suppliers directly or to their local agents.

 

According to a statement from the supply ministry, Egypt, usually the world's largest importer of wheat, officially opened the new commodities exchange by giving private sector mills access to 12,000 tonnes of Russian wheat from its reserves.

 

The new exchange is intended to function as a spot market where supply and demand determine prices. Currently, GASC chooses the best offer from bidders who submit their proposals in sealed envelopes under a "closed bidding" system.

 

The action was taken in response to complaints from private importers and mills in Egypt who were having trouble paying for hundreds of thousands of tonnes of wheat that were stuck at ports as a result of a dollar shortage that was limiting imports and driving up the price of bread and flour.

 

Ashmawy said the exchange is absolutely necessary to control the market. He said there are numerous price distortions and the market is not in good shape.

 

The supply ministry reported on Monday that on the first day of trading on Sunday, wheat was sold for EGP 9,750 (~US$397; EGP 10 = US$0.41) per tonne in 18 transactions.

 

200 companies, including 36 mills, haveregistered on the exchange. The Egyptian government is looking into the possibility of trading 10 more commodities, including rice, gold and steel.

 

-      Hellenic Shipping News