Egypt to sign hedging contracts for FY2019-20 in two weeks
EXCLUSIVE- Egypt could sign hedging contracts for FY2019-20 in two weeks’ time: The government could sign in as little as two weeks’ time contracts to hedge against the price volatility of fuel, imported wheat and cooking oil, a senior government official told Enterprise. The contracts begin in FY2019-20 to help ensure Egypt meets its budget deficit target in the coming financial year. The Finance Ministry has received 20 offers from global and GCC-based institutions, the official said.
Background: We noted earlier this month that the government was considering hedging against the prices of strategic imports, including wheat and petroleum, starting from July. Finance Minister Mohamed Maait said a day later at a press conference that the mechanism has in fact been put in place, but that a time frame had not yet been decided. Last December, the government pulled back from two fuel hedging contracts as crude prices turned lower than expected. The ministry at the time was also working to expand its hedging strategy to include wheat and other commodities.