Egypt’s GASC wants to change its wheat import regulations
The General Authority for Supply Commodities (GASC) is looking to change its grain import process to include at-sight letters of credit (LCs) for upcoming tenders, assuring payments to suppliers as soon as they submit the necessary documents, Reuters reports, citing unnamed traders. The state grain buyer has been relying on deferred payments in its wheat tenders. The LCs would be paid through the Islamic Trade Finance Corporation, according to the traders.
GASC could also begin asking suppliers to offer their prices on a cost and freight basis, rather than the traditional free-on-board (FOB). The main difference between the two is who pays for the shipping or freight costs; cost and freight agreements make the seller responsible for arranging and paying for transportation, while under FOB agreements the seller owns and is responsible for the product only until it is loaded onto the shipping vessel. FOB agreements therefore put the responsibility and cost of any loss or damage to the goods from that point on the buyer. The potential changes come ahead of an anticipated tender to boost strategic reserves after GASC unexpectedly canceled a tender earlier this week. Previous reports indicated that Egypt is expected to import 12.85 mn tonnes of wheat in marketing year 2020-2021, inching up slightly by 0.4% from 12.8 mn this year.