Egypt in Talks with UAE bank for wheat purchase loan from Kazakhstan

CAIRO - 21 September 2023: Egypt is currently in negotiations with a UAE bank to secure a loan to finance wheat purchases from Kazakhstan, according to three traders speaking to Reuters.

 

This move could potentially provide Egypt with a cost-effective alternative to Russian grain imports. Russia has been supplying an increasing share of Egypt's wheat since last year, but they recently refused a purchase deal below the unofficial minimum price for wheat procurement.

 

Egypt recently signed a $500 million loan agreement with the Abu Dhabi Exports Office, part of the Abu Dhabi Development Fund, for wheat imports over five years, with an annual value of $100 million.

 

Egypt is one of the world's largest wheat buyers and is trying to reduce its import bill amid foreign currency shortages that have led to the delay of wheat payments.

 

Negotiations for the loan deal to purchase wheat from Kazakhstan are still in the early stages, including discussions on the wheat's price, quantities, and the loan amount.

 

Sources indicate that the Egyptian General Authority for Supply Commodities is negotiating a price that could be lower than the unofficial minimum price set by the Russian government, which is believed to be $270 per ton at the ship's delivery in the tender.

 

Traders, however, have expressed doubts about the feasibility of this deal, citing logistical challenges in shipping wheat from Kazakhstan and the need for overland delivery through other countries.

 

It's worth noting that the Russian Ministry of Agriculture recently blocked the sale of 480,000 tons of Russian wheat to Egypt specifically because it was sold at a price below the minimum official price.