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Thursday, 13 October 2022

GASC will let private mills buy its wheat to help ease imports squeeze

GASC to sell wheat to struggling private sector: State grain buyer GASC will on Saturday start selling wheat to mills producing 72% extraction wheat flour, which is used to make unsubsidized bread, pasta, and other foods. The move will last for one month and comes to prevent a rise in flour prices, the Supply Ministry said in a statement, amid reports that private mills are struggling to get their wheat purchases out of ports amid the country’s FX shortage.

The price list: Mills can buy wheat at EGP 8.7k per ton. Pasta makers operating under GASC’s framework will be able to buy flour from the state grain buyer at EGP 10k a ton.

The Supply Ministry is working with the central bank to secure letters of credit for wheat importers and get their shipments released from ports, the statement reads, saying the move would help stabilize flour and bread prices in the short term.

Some 700k tons of wheat destined for private sector mills is stuck at ports, Reuters reports traders and Egypt’s chamber of cereals as saying. Importers are struggling to find the hard currency needed to get shipments released, says the newswire, leading some 80% of private mills to shut up shop.

REMEMBER- The government imposed price controls on unsubsidized bread in March as a temporary, three-month measure, after war in Ukraine sent global wheat markets spiraling. Wheat prices on the international markets have since cooled, but FX pressures, supply chain snarls, and global monetary tightening have meant food price inflation remains elevated.

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