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Sunday, 10 June 2018

GASC cancels wheat shipment from Dubai-based AOS

GASC cancels wheat shipment from Dubai-based AOS: The General Authority for Supply Commodities (GASC) has cancelled a 60k tonne order of Russian wheat from Dubai-based trader AOS on Thursday after repeated delays in delivery, traders told Reuters Arabic. “There were severe delays and state grain buyer GASC officially cancelled the deal today,” one Cairo-based source said. Supply Minister Ali El Moselhy told the newswire last month that the company was given two extensions for delivering the wheat but had failed to meet both deadlines. AOS had won tenders to deliver 120,000 tonnes, and reportedly failed to deliver both shipments. It is unclear if an order for the second 60,000 tonnes from the company was still in progress. The cancellation could force Egypt to tap the international wheat market earlier than expected. Domestic wheat collection season is still ongoing, and Egypt typically suspends international shipments during that time.

The cancellation is the latest disruption to Egypt’s wheat imports over the last few weeks, which could potentially make Egypt’s imports more expensive in international tenders. While AOS’ failure to deliver the wheat is certainly a reason to cancel a shipment, the timing of the move leaves much to be desired. GASC had rejected a 63,000-tonnes shipment of Russian wheat the previous Thursday, saying that the shipment’s ergot contamination level was over the international standard of 0.05%. Egyptian quarantine officials reversed the decision last week, after throwing a wrench to the global wheat market. These events came days after the Higher Administrative Court definitely ended years of confusion over Egypt’s ergot rule. These disruptions are already driving higher prices on Egypt’s tender, according to traders.

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