Egypt appoints Mostakbal Misr as exclusive food importer, replacing GASC

A new agency has emerged as a significant player in the importation of wheat and other food products into Egypt, replacing the former state purchasing agency, the General Authority for Supply Commodities (GASC), according to a letter seen by S&P Global Commodity Insights.

On Dec. 6, Minister of Supply and Internal Trade Sherif Farouk announced in a letter to Oksana Lut, Russia's Minister of Agriculture, the appointment of Mostakbal Misr, the Egypt Future Agency for Sustainable Development, as the exclusive importer of food items into Egypt through tenders and private deals, assuming the responsibilities previously held by GASC.

The letter states that this entity is "the only government agency that has the exceptional powers to organize international tenders and contract by direct order to purchase wheat and other food products to meet the needs of the Arab Republic of Egypt."

Furthermore, the Egypt Future Agency retains all the powers previously exercised by GASC and allows all approved grain and food product suppliers to participate in tenders and direct purchases.

The agency is also equipped with the financial capacity to fulfill all obligations to companies that win direct purchase contracts and to ensure the completion of shipment supplies, as noted in the letter.

Traders have responded to this development with anticipation, eager for more details on how the situation will unfold.

"We have to wait and see how it will work," a seller said.

"They want to operate like the private sector, without any added costs from government tenders," another trader said.

Some traders pointed out the recent silence from former state buyer GASC and the pending wheat purchase from a private deal that has not yet arrived in Egypt. GASC had previously acquired approximately 400,000 mt of wheat in September through a private deal outside of tenders, which was expected to arrive in November. Traders said that the loading of this purchase has only just begun, with "the first 63,000 mt shipments loaded so far," according to one trader. "No cargo seems to have been delivered so far," another one said.

In October, traders said that an unofficial price floor for Russian wheat had been set at $250/mt for tenders, while in private deals, many sellers manage to circumvent these restrictions by selling on a CIF basis.

"They might want to buy CNF and cannot get cheaper offers from Russia when [Russian suppliers] are selling FOB in tenders with a Russian price floor," another seller said.

When Russia enforces a price floor, it typically allows other sources to provide wheat to Egypt at more competitive prices. Former state buyer GASC opted to purchase 290,000 mt from Bulgaria, Ukraine, and Romania for November 25 to December 15 deliveries, at $273-$275.30/mt CFR with 270 days letter of credit in their last tender on Nov. 4.

Mostakbal Misr made its initial move on Nov. 28, attempting to secure some wheat vessels in an announcement to traders, but no purchases were finalized as traders awaited more information regarding the new agency. Established under a presidential decree in 2022, the agency functions as the development arm of the Egyptian Armed Forces, according to traders.

Platts, part of S&P Global Commodity Insights, assessed the price of 12.5% Russian wheat at $231/mt on Dec. 6 for Jan. loading, up almost 2% on the week.