The Mostakbal Misr Agency for Sustainable Development in Egypt reportedly did not make any purchases during its inquiry for wheat and vegetable oil on Thursday, according to multiple sources.
Key Highlights:
Lack of Offers:
Traders indicated that no price offers were submitted, and companies are seeking clarification regarding purchasing and payment terms from the agency.
Despite this, several trading houses participated in a meeting at the Mostakbal Misr offices.
Procurement Strategy Shift:
Mostakbal Misr had initially invited offers by noon local time (10 a.m. GMT) on November 28, following an announcement for bids to be negotiated directly rather than through formal international tenders.
This approach marks a potential shift away from the traditional international tender system used by the General Authority for Supply Commodities (GASC), Egypt’s primary buyer of essential commodities.
Response to Export Pricing:
Some traders believe that this pivot to direct purchases is a response to Russia’s unofficial minimum export price policy, which has made it challenging for exporters to provide competitive prices in public tenders. A European trader suggested that direct negotiations might enable Egypt to secure better prices.
Skepticism from Russian Exporters:
Russian exporters remain cautious, with the Union of Grain Exporters expressing unfamiliarity with Mostakbal Misr’s ownership and financial standing. Several Russian suppliers have stated they will not proceed without confirmation that the agency is operating on behalf of the Egyptian government.
A trader noted, “It looks like they were trying to do things too quickly. The trading houses really do not know who the agency is.”
Concerns Over Contract Details:
There are significant risks involved in grain deals, particularly with large sums at stake. Minor changes in specifications by GASC in the past have caused substantial delays and financial losses for sellers.
“The devil is in the detail in grain deals,” one trader remarked, highlighting the need for clarity in contracts and execution.
Background on Mostakbal Misr:
Established in 2022 through a presidential decree, Mostakbal Misr evolved from land reclamation projects initiated in 2017.
Lack of Official Comment:
Mostakbal Misr, GASC, and the Supply Ministry have not responded to repeated requests for comments from Reuters.