Egyptian authorities are trying to change the system of public procurement of wheat, but are facing resistance

On the evening of November 27, Mostakbal Misr announced the purchase of wheat for shipment in January and vegetable oils for delivery in February-March under direct contracts. Offers on a CIF basis with a 270-day deferred payment will be accepted until November 28. The tender terms, except for the delivery basis, are in line with GASC requirements.

Representatives of Mostakbal Misr, which Reuters describes as a sustainable development agency, attended the latest GASC tender on November 4, observed the process and asked for traders’ contact details after the bidding. Bidders suggest that Mostakbal Misr is trying to “sideline” GASC, but that the agency lacks experience and market connections. Until now, Mostakbal Misr, founded in 2022 by order of the Egyptian president, has been engaged in land reclamation projects.

The Union of Grain Exporters and Producers of the Russian Federation has already stated that it will not participate in the Mostakbal Misr tender or in private negotiations with this or any other company that will be purchasing for the state unless the Egyptian authorities provide official notification of the authority of such an organization. Currently, there is no information about the owners of the new Mostakbal Misr structure or its financial condition.

The Union of Exporters also recalled the initiative adopted in October, according to which no Russian grain exporter will supply products to intermediaries acting on behalf of government buyers.

In September, Egypt announced the purchase of 480 thousand tons of Russian wheat from a little-known company without a tender, but Russian exporters united and did not sell the grain, which disrupted the supply.

GASC’s wheat tenders have always provided price indications to the markets and promoted open competition in the supply of the world’s largest wheat importer.

According to traders, the tender announced by Mostakbal Misr remained unfulfilled. Although the agency positions itself as a new unit of the Egyptian government, market participants have doubts about the company and its documentation.

Tags: wheat, edible oils, Egypt, tender