Egypt’s grain market resembles a “house of cards” — Interlegal

Egypt’s grain market is facing systemic payment delays due to recent changes in state procurement mechanisms, according to Interlegal partner Artem Skorobogatov. He told Latifundist.com that the new structure of interaction between government bodies, banks, and intermediaries has created a complex chain where any disruption can halt the flow of funds.

Earlier reports indicated that eight vessels carrying Ukrainian wheat remain anchored at Egyptian ports due to delays in opening letters of credit for state buyer Mostakbal. Around 200,000 tons of grain are reportedly awaiting payment.

Skorobogatov compares the current situation to a “house of cards” — a fragile system with multiple interdependent actors where even minor delays can paralyze transactions. He emphasized that the issue is not caused by bad faith but stems from bureaucratic transformation after a change in the authority responsible for state purchases.

Previously, Egypt’s grain tenders were handled by GASC, which operated within a well-established framework — transparent tenders, verified banks, and predictable payment schedules. Now, contracts are signed by one entity, foreign currency is allocated by the Central Bank, and settlements are managed by various financial institutions that often lack clear instructions or liquidity. The involvement of local intermediaries — who buy grain and then resell it to the state — has further complicated the process.

This multi-layered system has led to a time gap between shipment and payment, where cargo arrives but documentation is stalled, leaving exporters and shipowners to bear demurrage and port costs. “Formally, no contract is breached, yet the delay already results in financial losses — and that’s where legal risks begin, potentially escalating to claims and arbitration,” Skorobogatov explained.

According to him, market participants are reacting differently: some are waiting for payments, others are reselling cargo to limit losses. Those who carefully document every action stand the best chance of legal protection. Despite the turbulence, Egypt will remain a key market for Black Sea grain — but traders must now treat it with “heightened legal caution,” anticipating unpredictable delays and maintaining a solid Plan B.

Tags: Ukraine, Egypt, grain, wheat, Interlegal