Delayed payments and broken contracts put Egypt’s new state grain buyer under pressure

Mounting tensions in Egypt’s grain market — driven by delayed payments, attempted contract renegotiations, and falling import volumes — have forced a major shake-up at the country’s newly created state grain buyer, Future of Egypt. According to industry and trade sources, the appointment of a new head of international purchases aims to restore confidence after months of uncertainty following the agency’s shift away from Egypt’s long-standing tender system, reports Reuters.

For decades, Egypt relied on GASC’s transparent tender mechanism, which set a global benchmark for physical wheat prices and ensured stable supplies for the bread subsidy programme feeding tens of millions. But since Future of Egypt — a military-linked entity — took over procurement in December 2024, it abandoned public tenders and turned to informal negotiations. Six international traders told Reuters that the new purchasing approach led to delayed payments, attempts to renegotiate prices after market declines, and cancellations of agreed deals — actions they viewed as unprecedented defaults under GASC.

These practices weakened trust among key suppliers of wheat and vegetable oils and contributed to a sharp decline in wheat imports. In the first half of 2025, Egypt imported just 5.2 million tonnes of wheat — 25% less than a year earlier — while government purchases fell by more than half to about 1.6 million tonnes. Sources said that by April, wheat stocks had dropped to slightly above one month of cover, far below the government target of six months and well under the seven-month buffer seen in mid-2024. Reserves were replenished only after the local harvest entered the market.

Confidence began to improve after the appointment of Yousria Yusry Mohamed, a respected former GASC official, to oversee international procurement. Three traders said her arrival prompted several global suppliers to resume sales, with payments made more regularly and contracts honoured. Still, several companies remain cautious and prefer to delay new deals until they see consistent contract execution and robust financial guarantees.

Transparency remains a major concern. Unlike GASC, Future of Egypt does not publicly announce purchases ahead of shipment; deals become known only once vessels reach port. According to six traders, this opacity complicates planning and increases commercial risks. In recent months, multiple disputes have emerged, including an arbitration case initiated by a Ukrainian supplier after Future of Egypt failed to issue letters of credit for a 12,000-ton sunflower oil shipment. A French wheat supplier also threatened legal action over delayed payments and demurrage costs before eventually receiving a letter of credit.

Analysts expect Egypt’s wheat imports to recover in the second half of the year, but warn that a smaller domestic crop next season will pose a serious test for the new procurement model. The International Grains Council forecasts Egypt’s wheat stocks will decline for a third consecutive year in 2025/26, reaching a multi-year low. Under these conditions, the effectiveness of government buying and coordination with the private sector will be crucial to maintaining strategic reserves.

Amid persistent economic pressures — including inflation, currency instability, and rising debt — Egypt aims to reduce its dependence on wheat imports. Yet a sudden drop in import volumes risks greater exposure to global price volatility, logistical disruptions, or poor harvests. Despite recent leadership changes and partial recovery in supplier relationships, several major international traders remain wary, with one saying it will not resume significant business until Future of Egypt proves reliable, accountable, and consistent in fulfilling its commitments.

Tags: Egypt, tender, grain, imports, restrictions