Egypt is in talks with Abu Dhabi Commercial Bank (ADBC) for a loan facility that would finance wheat purchases from Kazakhstan, according to Egypt’s Supply Minister, Report informs referring to Reuters.
The move could give Egypt a cheap alternative to grain from Russia, which has supplied an increasing share of Egypt’s wheat since last year but recently blocked a deal for a purchase below an unofficial price floor for wheat purchases, traders say.
Egypt is a top buyer of wheat globally that has been trying to reduce its import bill as it grapples with a foreign currency shortage that caused it to defer wheat payments.
Talks over the loan deal for purchases from Kazakhstan are in early stages, with negotiations taking place over the price and quantities of wheat as well as the value of the loan, a source with knowledge of the talks said.
The source and traders did not name the Abu Dhabi-based bank.
The traders said they learned of the potential deal during a wheat tender on Wednesday by Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC).
They were told GASC was negotiating a price that could be lower than the unofficial price floor set by Russia’s government, which was believed to have been set at a free-on-board price of $270 per metric ton in the tender.
But they also cast doubt on the potential deal, saying that shipping wheat from Kazakhstan would be logistically challenging, requiring overland deliveries through other countries.