FinMin to expand hedging on other goods, including wheat
EXCLUSIVE- FinMin to expand hedging to other commodities, including wheat: It appears that the Finance Ministry is indeed to looking to initiate a program to hedge against volatility in the global price of wheat in manner similar to its fuel hedging program, a ministry source told Enterprise. The move is part of a series of initiatives announced by minister Mohamed Maait over the weekend to keep fiscal spending under control. Both Maait and the source implied that the hedging program would be expanded to include other goods Egypt imports.
Could the fuel hedging program be dead if oil prices stabilize? “There may not be a need to sign a fuel hedging agreement if global oil prices continue to stabilize,” the source told us. Oil prices have been stabilizing of late as Saudi Arabia and other leading producers adopted production cuts after oil surged beyond the USD 80/bbl mark earlier this year. That said: Crude has shot up about about 9% in the past two weeks to just under USD 78 / bbl.
Background: The government had selected last month a derivatives trading outfit to help hedge against rising oil prices, its primary strategy to counter rising oil prices.