Egypt to issue wheat tender in 2-4 weeks
Cairo, October 28, 2013
Egypt, the world's biggest wheat importer, will issue an international tender within the next two to four weeks to ensure its wheat supplies last until end-March, the supplies minister said.
"(Current wheat stocks) are enough to last till February 18," Supplies Minister Mohamed Abu Shadi told Reuters in an interview late on Saturday. "We will increase the stocks to last till end-March."
He also said Bulgaria had expressed interest in supplying wheat to the Arab country and that Egypt was studying the quality and price competitiveness of the offer.
Egypt needs huge quantities of wheat to make flour for its bread subsidy programme, which supplies saucer-sized flat loaves of bread for less than one US cent to millions of citizens. The program costs 21 billion Egyptian pounds ($3 billion) annually, Abu Shadi said.
The government and private Egyptian buyers purchase around 10 million tonnes of wheat a year from abroad. The main state wheat buyer, the General Authority for Supply Commodities (GASC) accounts for 5 to 5.5 million tonnes of the total.
The minister said the goal was to amass six months worth of stocks.
"We will contract within the next two to four weeks to raise stocks till end-March," Abu Shadi said. The agency will monitor prices on international markets to help determine timing, he added.
Since the start of the 2013-2014 fiscal year on July 1, GASC has bought 2.205 million tonnes of wheat from Romania, Ukraine and Russia. Egypt is now targeting imports of 5 million to 5.5 million tonnes for the remainder of the year to June 30, 2014.
Bulgaria told Abu Shadi it had a surplus of two million tonnes of wheat and was interested in being a supplier, he said.
"I said, 'Let me know your quality, specifications, price and if there's a competitive value in your product that is cheaper than on international bourses. I don't mind even signing a protocol with you,'" Abu Shadi said.
Egypt's economy has been hit by social and political turmoil since a popular uprising toppled autocrat Hosni Mubarak in early 2011, raising worries it would not be able to finance food and fuel imports.
It has been supported in recent months by funding from several Gulf Arab states.
Abu Shadi said letters of credit to suppliers have been opened and that Egypt had been absent from the market in recent weeks due to high prices.
Asked whether Egypt would consider changing its regular public wheat tendering system, Abu Shadi said: "No, unless we find a justification. Whatever is in the interest of the country we will do ... So long as the money is in our pockets, we are flexible to buy, whether through tenders or contracts. There are no restrictions." - Reuters