Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), made a private purchase of Russian wheat this week, bypassing the traditional tender process, according to three sources familiar with the deal, as reported by Reuters.
Two of the sources revealed that GASC secured 430,000 metric tons of Russian wheat for shipment in October. The Egyptian Supply Ministry later confirmed the transaction on Thursday.
The sources indicated that the wheat was acquired from Russian grain trader United Grain Company (OZK) through an intermediary. OZK has not yet commented on the deal. The ministry disclosed that the purchase price was $235 per metric ton, although earlier trade estimates suggested the intermediary had originally secured the wheat at $231 per ton, with GASC potentially paying $233 per ton. It remains unclear if these figures include shipping costs.
Egypt, one of the world’s largest wheat importers, is capitalizing on declining global wheat prices to secure grain supplies, which are vital for its subsidized bread program, benefiting millions of Egyptians.
Last month, Reuters reported that Egyptian President Abdel Fattah al-Sisi had personally ordered GASC to conduct its largest-ever wheat tender in August. However, only 7% of the target was met due to higher-than-anticipated prices.
In ongoing efforts, GASC is reportedly negotiating to purchase up to 1.8 million tons of wheat from various suppliers, including Russia. The country has faced economic challenges, including high inflation and a foreign currency shortage, prompting assistance from the International Monetary Fund and Gulf allies.
Egypt has also implemented austerity measures, including raising the price of subsidized bread earlier this year. Despite these hurdles, Supply Minister Sherif Farouk expressed confidence in reaching the country’s target of 3.8 million tons of wheat by the end of 2024, through a mix of tenders, direct purchases, and government-to-government agreements.
“We still have the green light to engage in direct talks to get the best price,” Farouk stated on Monday.
