Egypt cancels contracts for 240,000 tonnes of Ukraine wheat
Egypt has cancelled contracts for 240,000 tonnes of Ukrainian wheat which were meant to be delivered in February and March but were prevented by the Russian invasion of Ukraine
Erin
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According to the Reuters news agency which quoted two anonymous sources with knowledge on the matter, Egypt's General Authority for Supply Commodities (GASC) has released the supplier companies – Nibulon and Inerco – from their contractual obligations, in effect cancelling four unloaded cargoes and one loaded cargo that has been stuck at Ukraine's port of Chornomorsk.
The cargoes were reportedly ordered in December at prices ranging between $346 and $360 per tonne including shipping costs. Following the Russian invasion of Ukraine and the subsequent rise in global prices of grain, GASC had to pay up to $494.25 per tonne of wheat in April.
The GASC previously granted the trading companies an extended time to provide the cargoes of wheat, from other origins if necessary, but the contracts have now been terminated despite them not declaring a force majeure – a clause that frees parties from liability in the case of events out of their control.
Prior to Russia's invasion of Ukraine, Egypt was the world's largest importer of wheat from the Black Sea region, resulting in the prevention of wheat exports directly impacting its supply of the essential commodity. Since then, though, Cairo has worked to diversify its wheat supplies by purchasing over a million tonnes this month both directly and through tenders.
Wheat supplies from Ukraine are also expected to resume soon, following a deal struck between Kyiv and Moscow last week – and brokered by the United Nations and Turkiye – in which the Kremlin has guaranteed the security of grain leaving Ukrainian posts and the right of passage for vessels carrying the cargo.
It was not clarified to Reuters whether Egypt cancelled its contracts before or after that deal was struck, however.
Source: Middle East Monitor under CC BY-NC-SA 4.0
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