10 Jan 2018 11:20

Egypt's first wheat purchase tender of 2018 held after additional negotiations - market expert

MOSCOW. Jan 10 (Interfax) - Egypt's commodity supply agency GASC has held its first wheat purchase tender, despite initial media reports that said no bids were received.

In fact, after additional negotiations, bids were received from seven companies, after Egypt gave assurances that the situation would be corrected, the head of the Institute for Agricultural Market Studies (IKAR), Dmitry Rylko, told Interfax.

The difficulty arose from Egypt's attempt to begin enforcing a little-used rule. "Recently GASC found in its documents a rule under which it has the right to charge supplying companies demurrage fees," Rylko said. "The suppliers were informed of this two days ago," he said, adding that the rule was to be applied to all demurrage instances retroactively to the beginning of the current agricultural year, that is, July 2017. "There were quite a lot of them," he said.

The move dismayed grain suppliers, resulting in the tender initially falling through.

Egypt had planned to purchase 180,000 tonnes of milling wheat for delivery in the February 11-20 period. It expected to receive bids on wheat from France, Bulgaria, Australia, Poland, Germany, the UK, Romania, Russia, Ukraine and several other countries.

The tender on Tuesday resulted in the acquisition of 115,000 tonnes of Russian wheat.

Egypt has already purchased a record amount of Russian wheat in the current season: 3.605 million tonnes (excluding the latest tender), which accounts for 78% of total purchases.