Egypt’s General Authority for Supply Commodities (GASC) has issued a massive tender for 3.8 million metric tons of wheat.
This tender, set to cover imports from October 2024 to April 2025, is the largest in the country’s history, according to traders who spoke to Reuters on August 6th.
Shipment and Payment Terms
The Egyptian government is seeking free-on-board (FOB) shipments and plans to finance the purchase through 270-day letters of credit.
This means that the seller is responsible for loading the wheat onto the vessel, and payment will be made 270 days after the shipment date.
Unusual Tender Requirements
GASC has requested that traders submit bids for shipments covering at least three months, with a deadline of August 12th.
This has raised eyebrows among traders, who typically submit bids for shorter periods. One trader described the tender as “very unusual,” stating that it’s challenging to provide freight offers so far in advance.
Potential Impact on Trading
Despite the unusual terms, another trader indicated that trading houses may still pursue the business, factoring in the banking costs associated with the 270-day payment delay into their price offers.
Domestic Wheat Price Increase
In related news, Egypt’s Ministry of Supply and Internal Trade recently raised the selling price of domestic and imported wheat supplied to mills for producing subsidized bread by approximately 20%, bringing the price to EGP 13,750 per ton as of August.
Wheat Reserves
Egypt’s strategic wheat reserves are currently estimated to be sufficient for around seven months. This tender aims to ensure the country’s food security and maintain its subsidized bread program.