Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), has announced a record tender for 3.8 million metric tons of wheat, aimed at covering imports from October 2024 to April 2025. This is the largest tender ever issued by GASC, which plays a crucial role in providing subsidized bread for millions of Egyptians.
GASC plans to procure wheat shipments scheduled between the 1st-15th and 16th-30th of each month, starting in October, with a specific shipment date range in February. The purchases will be made on a free-on-board basis with 270-day letters of credit, requiring traders to submit bids for at least three months of shipments. The deadline for offers is set for August 12.
Traders have expressed skepticism about this unconventional tender approach, noting that it is atypical to submit bids so far in advance. The new strategy marks a significant shift for GASC, which is navigating economic challenges with support from the International Monetary Fund and Gulf nations.
Egypt’s Finance Minister Ahmed Kouchouk commented on the situation, highlighting that while the global sell-off of commodities has negative repercussions, prices are currently at a near four-year low, presenting a potential buying opportunity.
Despite this, some traders doubt Egypt’s ability to fulfill its ambitious procurement goals, citing concerns over the lengthy payment terms. However, others believe trading houses will adapt to the situation by factoring in the banking costs associated with the delayed payments.
As of July, Egypt’s strategic wheat reserves were estimated to be sufficient for 6.9 months of demand, and GASC aims to maintain reserves to cover nine months.