Egypt's GASC amends wheat tender book to allow suppliers to present shipment bids

Adds detail, background

CAIRO, June 16 (Reuters) - Egypt's state grains buyer, the General Authority for Supply Commodities (GASC) on Wednesday amended its tender book for international wheat purchases to allow suppliers to directly present shipment bids for their cargoes, a document seen by Reuters showed.

The change comes after GASC cancelled its latest wheat tender on Tuesday, a move many traders attributed to high shipping prices presented at the tender.

"[This change] doesn't solve their immediate problem which is high freight rates, but it does solve the crunch of a lack of vessels on offer now," said an Egyptian trader.

GASC received offers for only three vessels at its last tender as the Baltic exchange's main sea freight index rose for the fifth straight session on Tuesday, supported by stronger rates across vessel segments.

"I think it will give more suppliers a better chance and will increase overall freight competition, which is ultimately for the good of Egypt... By the next tender oil could be up which will make [freight] more expensive, or by chance it could be down and freight will be lower," said another Egypt-based trader.

The change, which concerns item 12 in the addendum to the country's standard international wheat tender book, will take effect from the buyer's next tender, the document said.

Traders had previously been allowed to submit their own shipping offers if their freight carriers were registered with the Egyptian Company for Maritime Transport (MARTRANS).

The change, penned by Egypt's supply minister, allows suppliers to bid directly to GASC and present their guarantees to the government entity responsible for regulating the import of crops.

"This will benefit the big trading houses with their own freight department. But I think there will be an unwillingness among wheat sellers to provide the ships as well," a European trader said.

"There is a great risk that if Egypt starts rejecting shipments you could be faced with huge costs for demurrage and other expenses," he added.

(Reporting by Nadine Awadalla in Cairo and Michael Hogan in Hamburg; editing by Jason Neely and Bernadette Baum)


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.