(MENAFN- Gulf Times) Egypt's state grain buyer GASC received fewer offers and was quoted higher prices in a wheat tender yesterday, as traders held back due to a dispute over two blocked import cargoes.
GASC received offers from six suppliers, down from the roughly 15 that normally bid to the world's largest wheat buyer.
One Cairo-based trader said prices offered included a risk premium of between $4 and $11 a tonne.
Traders said the lower participation and higher prices were due to uncertainty after Egypt referred a Romanian and a French cargo to its prosecutor for containing poppy seeds.
The prosecutor has not made a decision yet but the cargoes are expected to be released after sieving.
Still, suppliers fear the process could take months amid high costs for demurrage.
The case is reminiscent of a dispute last year when traders shunned Egyptian tenders after the country briefly introduced a zero-tolerance policy towards the common grain fungus ergot.
'There is serious worry about the poppy seeds problem which has reduced tender participation today. This could cause vessel delays in ports of several weeks, even up to a month, a European trader said.
In the tender, Egypt is seeking cargoes for shipment October 21-31. The lowest offer was $195 a tonne free-on-board for 60,000 tonnes of Russian wheat, while the best price after shipping costs was for $212.20 a tonne cost and freight for a 60,000 tonne Russian cargo.
The Cairo trader said the risk premium added to the Russian wheat was around $4 a tonne, while French and Romanian wheat were quoted $10 and $11 a tonne higher respectively.
Egypt sees $12bn finance gap
Egypt expects a funding shortfall of $10bn to $12bn in its current fiscal year, when it plans to issue $8bn in new dollar-denominated bonds, the Finance Minister has said. Amr El Garhy also predicted economic growth between 5% and 5.25% in the year ending June 2018 — up around half a percentage point on a government forecast made in August. 'We want to do 6% (growth) in the longer term and in a sustainable way. Historically we make reforms and then 2-3 years later we fall into a trap and make mistakes, he told a Euromoney conference on Monday. Days after floating its pound currency last November, Egypt signed a $12bn three-year loan with the International Monetary Fun tied to sweeping economic reforms including tax hikes and subsidy cuts.
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