UPDATE 1-Egypt resumes wheat tender after failed August buying

(Adds detail, context, paragraph three onwards)

CAIRO, Nov 3 (Reuters) – Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), said on Sunday it was seeking an unspecified amount of wheat in an international purchasing tender for the first time since August.

The offers deadline is Nov. 4, submitted on a free on board (FOB) basis with payment using 270-day letters of credit, it said. Shipping will be from Nov. 25 to Dec. 5 and/or Dec. 6-15.

This is the first GASC tender since an unprecedented tender on Aug. 6. Following directives from President Abdel Fattah al-Sisi, the August tender sought 3.8 million metric tons of wheat to cover half of annual wheat needs with deliveries extending to April 2025.

As sellers hedged against global uncertainties and sought a premium, the tender only secured around 7% of the targeted volume.

The GASC began direct negotiations with suppliers, including an unnamed Egyptian intermediary, to try to find more favourable deals.

It subsequently contracted 430,000 tons of Russian wheat, initially scheduled for October delivery, but the shipment has been delayed. Supply Minister Sherif Farouk has said he expects it to arrive this month.

In October, Prime Minister Mostafa Madbouly said that Egypt had sufficient wheat reserves for more than 5-1/2 months, slightly less than the six-month threshold Egypt’s supply minister said he aimed to maintain.

Apart from adding to nervousness about supplies, the delays to shipments have put pressure on Egypt’s already strained finances as global prices have increased since the failed August tender, aggravated by the subsequent delay.

Hesham Soliman, a Cairo-based grains trader, was sceptical the delayed October cargo would arrive at all.

“If you have a large shipment expected already in November, why go to the market and seek more for around the same time. Where would you store it?” he said.

The GASC would not comment on the attempt to tender for more.

Soliman said the price of the delayed cargo would be about $265 per ton, including shipping, compared with around $241 in the August tender and $235 in the direct deal. (Reporting by Mohamed Ezz Editing by David Goodman and Barbara Lewis)

(c) Copyright Thomson Reuters 2024. Click For Restrictions – https://agency.reuters.com/en/copyright.html