- Egypt is the world's largest wheat buyer
- President Sisi has urged authorities to boost reserves
- Traders spooked by new origin swap requirement
(Adds cancellation, trader comments, details, adds CAIRO to dateline)
Egypt's state grains buyer, the General Authority for Supply Commodities (GASC), on Wednesday cancelled a tender to buy an unspecified amount of wheat from global suppliers shortly after announcing it, without giving a reason.
Egypt, the world's largest wheat buyer, has said its wheat stocks are sufficient for around three months of consumption and is expecting the harvest season of its local crop to begin by mid-April.
Still, Egypt's president, Abdel Fattah al-Sisi, on Monday encouraged authorities to boost the country's reserves of strategic commodities amidst rising global fears for food supplies due to the coronavirus pandemic. .
GASC Vice Chairman Ahmed Youssef initially said the authority was seeking to buy cargoes of soft and/or milling wheat from the United States, Canada, Australia, France, Germany, Poland, Argentina, Russia, Kazakhstan, Ukraine, Romania, Bulgaria, Hungary, Paraguay and Serbia.
Tenders were to reach GASC by 11 a.m. (0900 GMT) on Thursday, one hour earlier than usual, to allow the tender to end before the country's 7 p.m. night curfew implemented by the government to combat the spread of the novel respiratory disease.
Traders said GASC had amended its tender regulations to require suppliers who were to bid on Thursday to replace contracted wheat of any origin with other cargoes should any coronavirus shutdowns block delivery of contracted cargoes.
They also said GASC had required suppliers to bear the difference in freight price and costs resulting from the potential change of origin.
"The changes seem to have been set in place as a result of concern over any future moves Russia may have to curb its exports," one trader said.
Russia's agriculture ministry last week proposed limiting Russian grain exports to 7 million tonnes in April-June because of the coronavirus. The government has yet to approve the idea.
While the proposal is unlikely to have much initial impact, as 7 million tonnes is roughly what Russia was expected to export in the last quarter of the 2019/20 season, the move has raised expectations tougher steps may follow, traders said.
The expected changes in GASC's tender rules had "spooked people," another trader said.
"Worries over a low turnout in the tender and high prices could have caused the cancellation," he said.
GASC normally seeks 55,000-to-60,000-tonne cargoes of the following: U.S. North Pacific soft white wheat; U.S. hard red winter wheat; U.S. soft red winter wheat; Russian milling wheat; Ukrainian milling wheat, and Australian standard white wheat on a free on board (FOB) basis with a separate freight offer.
