Egypt Cancels Wheat Tender as Virus Supply Risks Spook Traders
Egypt Cancels Wheat Tender as Virus Supply Risks Spook Traders
(Bloomberg) -- The fallout from the coronavirus crisis is starting to upend wheat tenders in the world’s top importer.
In a rare move, Egypt canceled a tender within hours of announcing it late on Wednesday, without giving a reason. The state buyer added a new clause requiring suppliers to replace any cargoes affected by virus-related restrictions with wheat from elsewhere, and bear the difference in costs, according to people familiar with the matter.
That prompted concerns from some suppliers, which could have led to a low turnout or offers at higher prices, said traders, who asked not to be identified as the information was private. GASC Vice Chairman Ahmed Youssef didn’t answer calls seeking comment.
The cancellation of the tender -- which would have been Egypt’s first since February -- highlights how the pandemic is threatening trade flows. Some countries including Russia, the biggest wheat supplier to Egypt, have taken measures to protect domestic food security and prices, including through limits on grain exports in the coming months.
“The return to protectionism, in both exporting or importing countries, is also visible,” farm adviser Agritel said in a note.
Egypt relies on imports to help feed a population of about 100 million people, and a decade ago saw shipments from Russia disrupted after the Black Sea country imposed an export ban. While Egypt last held a tender in mid-February, it typically issues fewer tenders at this time of year.
©2020 Bloomberg L.P.