Egypt strikes Ukraine from approved wheat supply list

Reuters, Thursday 15 Nov 2012

Egypt's main wheat buyer decided to remove Ukraine from the suppliers list after Kiev said it would halt exports from 1st of December due to drought it suffers

Ukraine had said it would ban wheat exports from Nov. 15 due to a weather-damaged harves (Photo: Reuters)

Egypt, the world's biggest importer of wheat, will remove Ukraine from its list of suppliers in 2013 after Kiev said it would halt exports from Dec. 1, the government's main buyer said on Thursday.

The decision is bad news for Ukraine, which has angered some of its foreign buyers by sending mixed messages on exports since a drought that decimated this year's crop, and may mean it struggles to sell to Egypt in the future even when it has available stocks.

Ukraine's Agriculture Ministry has told traders that exports of wheat had almost reached the maximum volume for the season, which runs to end-June 2013, according to a letter seen by Reuters.

"We received an official letter that from 1 December there will be no more exports from Ukraine...From January, GASC will remove Ukraine," Nomani Nomani, vice chairman of the General Authority for Supply Commodities (GASC)said through a translator on Thursday on the sidelines of the Global Grain conference.

Ukraine in future will have to meet certain conditions in order to be re-instated on Egypt's list of potential suppliers, Nomani added.

"One of the conditions to come back on the GASC list is that they have to declare there will be no ban on future contracts," he said.

Ukraine had previously said that the country would ban wheat exports from Nov. 15 due to a weather-damaged harvest. The agricultural ministry on Thursday declined to comment on the timing of the ban.

Uncertainty about exports from the Black Sea region has placed importer Egypt in a potentially vulnerable position. GASC has been an active buyer in recent months, snapping up almost seven months' wheat stocks for Egypt in a tight global market.

Two Ukrainian wheat shipments of 60,000 tonnes each, already sold to Egypt via tender, will still arrive and the shipping dates have been advanced slightly due to the export problems, Nomani added.

"It is not a surprise because the market has long been waiting for this decision," said one grains trader.

GASC plans to import at least 1.5 million tonnes of wheat in the first four months of 2013, with supplies expected to come from France, Canada, Russia, Argentina, Australia and the United States, he said.

During the 2011/12 fiscal year, GASC's purchases were dominated by Black Sea origin wheat.

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