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Egypt's GASC fails to issue letters of credit for 16 wheat cargoes, sources

Wednesday 05 December 2018 03:05 PM

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Reuters 
Egypt, the world’s largest wheat buyer, has not issued letters of credit for 16 recent cargoes, effectively delaying payment, sources familiar with the matter told Reuters on Wednesday. 

Cairo spends around $1.5 billion annually on wheat imports as part of a bread subsidy programme relied on by tens of millions of Egyptians facing IMF-backed austerity measures. 

The payment issue, which affects cargoes amounting to 945,000 tonnes of wheat, goes as far back as shipments purchased in international state buying tenders that arrived at the end of November. 

“We don’t know the exact nature of the problem as to why there is a delay in letters of credit but what we do know is nothing will happen before January because that is what the ministry of finance has told GASC,” a Cairo-based trader with knowledge of the matter said. 

Egypt’s state grain buyer, the General Authority for Supply Commodities (GASC), and the supply ministry which oversees it were not available for immediate comment. 

The three shipping periods affected are Nov. 11-20, Dec. 1-10 and Dec. 11-20, traders said. 

The grains buyer has asked traders who sold cargoes for the Dec 11-20 shipping period if they could delay their shipments until January, trade sources said, while suppliers for the other two shipping periods were not informed in advance of a delay. 
GASC typically opens letters of credit, which are a form of guarantee that payment will be made on time, for payment within 180 days.




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