Egypt is presently in discussions with a bank in the United Arab Emirates (UAE) to obtain a loan for financing its wheat procurement from Kazakhstan, as reported by three traders to Reuters.
This development could potentially offer Egypt an economical substitute for the wheat it imports from Russia. Russia has been supplying an increasing share of Egypt's wheat since last year, but recently, they declined to fulfill a purchase deal that fell below the unofficial minimum price set for wheat purchases.
Egypt recently inked a $500 million loan agreement with the Abu Dhabi Exports Office, a part of the Abu Dhabi Development Fund, to facilitate wheat imports over a span of five years, with an annual value of $100 million.
Egypt is among the world's largest purchasers of wheat and is striving to reduce its import costs due to foreign currency shortages that have led to delays in wheat payment.
Negotiations for the loan arrangement aimed at procuring wheat from Kazakhstan are still at an early stage, encompassing discussions on wheat prices, quantities, and the loan amount.
Sources indicate that the Egyptian General Authority for Supply Commodities is bargaining for a price that might be lower than the unofficial minimum price established by the Russian government, which is estimated to be $270 per ton upon delivery at the ship in the tender.
However, traders have expressed reservations about the practicality of this deal, citing logistical complexities in shipping wheat from Kazakhstan and the necessity for land-based transportation through other nations.
The Russian Ministry of Agriculture recently prohibited the sale of 480,000 tons of Russian wheat to Egypt specifically because it was sold at a price below the minimum official price.
