UPDATE 1-Russian exporters will not sell wheat to Egypt’s Mostakbal Misr agency, says lobby group

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MOSCOW, Nov 28 (Reuters) – Russian exporters will not sell wheat to Egypt’s Mostakbal Misr Agency for Sustainable Development unless there is notification from the Egyptian government that the agency is acting on its behalf, a Russian exporters’ lobby group said on Thursday.

The agency said it plans to secure wheat and vegetable oils through direct purchase agreements, signalling a shift in procurement strategy, diverging from the tender system used by the General Authority for Supply Commodities (GASC), Egypt’s primary state buyer of essential commodities.

“The Union of Grain Exporters and Producers officially announces that it knows nothing about the owners of the new entity or its financial situation,” the union said in a statement.

Russia, the world’s largest wheat exporter, has attempted to limit grain supplies to global markets to prevent a price spike at home as President Vladimir Putin seeks to combat inflation fuelled partly by military spending.

The union, which says it represents companies exporting more than 80% of Russin grain, said in October that only Russian grain companies will be able to sell directly to sovereign buyers.

The new rules excluded international dealers unless they have long-term off-take agreements with Russian companies.

The union’s statement said that the Mostakbal Misr agency is viewed as an intermediary.

“Thus, Russian grain exporters will not participate in this tender or in private negotiations with this or any other company allegedly purchasing for state needs, without an official notification from the respective state regarding the authority of such an organisation,” the statement said.

Besides restrictions on middlemen, the Russian government has already increased export taxes on grain and introduced an unofficial minimum selling export price, Reuters sources have said.

Traders and market analysts have said that Russia’s new export policy could cause friction with major importers, including political allies, such as Egypt, that would face higher bills for food imports. (Reporting by Olga Popova Writing by Gleb Bryanski Editing by David Goodman)

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