Russia may fail to supply wheat to Egypt's GASC in Jan, GASC asks traders to honour contracts

Reuters , Wednesday 24 Dec 2014

An aerial view shows a combine harvesting wheat in a field near the village of Divnoye, some 190 km (118 miles) northeast of Stavropol in southern Russia, July 4, 2013 (Photo: Reuters)

Russia may fail to supply wheat to Egypt's GASC, the state buyer of the world's largest wheat importer, in January due to export curbs, Russia's Grain Union head Arkady Zlochevsky told reporters on Wednesday.

Russia, expected to be the world's fourth-largest exporter this year with the largest buyers in Turkey and Egypt, had been exporting record volumes of a big grain crop of 104 million tonnes.

Russian Prime Minister Dmitry Medvedev said this week that it was "time to think about imposing administrative restrictions on (grain) exports."

Egypt's state grain buyer the General Authority for Supply Commodities (GASC) said on Wednesday trading companies were obliged to abide by their contracts to ship Russian wheat to Egypt during January.

"Traders have to abide by their contracts," Mamdouh Abdel Fattah, GASC's vice chairman told Reuters after the Zlochevsky, told reporters his country may fail to supply wheat to Egypt's GASC in January.

Russia may be forced into protecting domestic bread prices from the country's currency crisis later in the 2014/15 marketing year, analysts said, challenging government pledges to avoid curbs on grain exports.

Agriculture Minister Nikolai Fyodorov said on Tuesday that Russia, one of the world's key wheat exporters, would only use its grain restocking programme to regulate exports, which are running at a record pace due to a slump in the rouble.

"I think the minister is quite honest when he says this, but life can force him to change his mind," said Andrey Sizov, the head of SovEcon agriculture consultancy.

The minister's comments are a step back from what he said last week when he signalled Moscow would consider all options to restrain exports except an embargo, which Russia used in 2010 when its crop was hit by drought.

Russia used a protective duty on wheat exports in 2008, but recent comments from officials suggest that Moscow will try to keep out of trouble with trade powers and the global export market by using less heavy-handed measures.

This story was compiled by Ahram Online


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