Egypt’s GASC strikes deal on direct monthly wheat supplies
Egypt’s state grains buyer has struck one of its largest ever direct wheat deals for monthly supplies from November to April, two sources with direct knowledge of the matter told Reuters.
The wheat will be shipped to the General Authority for Supply Commodities (GASC) with around 510,000 metric tons to be supplied every month sourced from Black Sea origins, and totalling up to 3.12 million tons over the period, one of the sources said.
Egypt is one of the world’s biggest wheat importers and uses the purchases to make heavily subsidised bread, a politically sensitive benefit available to tens of millions of people.
The state buyer usually buys the strategic commodity through transparent international tenders that move the global grains market.
It has opted to buy wheat privately through direct deals in recent years to garner more competitive prices, with this newest deal marking its largest ever agreement.
The deal is set to be supplied by a joint venture between an Egyptian entity and a major global supplier on a monthly basis, the source said without disclosing the names of the companies due to the sensitivity of the matter.
The joint venture had already agreed to supply GASC with 430,000 metric tons for October shipment, Reuters reported last month.
The price for the deal will be agreed upon based on market prices on a monthly basis, the same source said.
GASC did not respond to a request for comment.
Some traders have cast doubt on whether the deal will be fulfilled, with one saying that it could be conditional on whether the company will be able to fulfill its October shipment.
GASC had tried to secure a similar quantity through its largest ever tender in August, which was personally ordered by Egyptian President Abdel Fattah al-Sisi as a result of food security concerns sparked by an intelligence briefing.
Egypt has suffered several financial shocks in recent years including from Russia’s invasion of Ukraine in 2022 which disrupted supply chains and caused global wheat prices to skyrocket.
The North African country has also been struggling with an acute foreign currency shortage, rising debt, record-high inflation and rolling blackouts over the past two years that have led to growing frustrations among Egyptians.
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