Russian supplier 'committed' to delivering wheat to Egypt despite price confusion - minister
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By Sarah El Safty
CAIRO, June 10 (Reuters) -A Russian wheat supplier that sold a 55,000-tonne cargo to Egypt is "committed" to delivering it but could look to source the grain from another country, an Egyptian minister said on Saturday amid confusion about a minimum price imposed by Russia.
Egypt's state grains buyer bought the wheat from Russia's Agric SA in a tender last week at $229 per tonne FOB (free on board), but traders said the supplier tried to withdraw the offer because it was below an unofficial price floor.
The tender shows Russia's diminishing flexibility over a minimum export price policy it has pursued to protect its farmers, as the supplier failed to get approval from Russia's agriculture ministry, traders said.nL8N35W46U
In March, the unofficial price floor was set at or above $275 to $280 per tonne, but according to traders it stood at $240 per tonne at the time of Egypt's tender.
If the supplier fails to supply the cargo to Egypt's General Authority for Supply Commodities (GASC), it would be faced with hefty penalties, traders said.nL1N37Y2J7
Egypt’s supply minister Ali Moselhy told reporters that "the supplier is committed. He [Agric] only asked to diversify origins."
Egypt's state buyer has been heavily relying on imports of Russian wheat since the start of the war in Ukraine.
Moselhy also said that the International Islamic Trade Finance Corporation (ITFC) has approved a $700 million financing tranche to Egypt this week to fund grain imports.
The funding is part of a 2018 financing agreement with the ITFC that was renewed last year for a further five years, with the credit limit doubled to $6 billion.
Egypt has recently had to defer payments to wheat suppliers due to a foreign currency shortage, Moselhy told Reuters last month.
The war in Ukraine initially caused a disruption in Egypt's wheat purchases, but reserves currently stand at 5.9 months.
The country has also procured 3.4 million tonnes from its local harvest, and plans to end domestic procurement in August, Moselhy said.
Reporting by Sarah El Safty
Editing by Frances Kerry and Clelia Oziel
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