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Egypt cancels contracts for 240,000 T of stranded Ukrainian wheat -sources

Published 27/07/2022, 18:54
© Reuters. FILE PHOTO: Stalks of wheat are pictured in a field in Al Qalyubia Governorate, Egypt, May 19, 2022. REUTERS/Mohamed Abd El Ghany
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By Sarah El Safty

CAIRO (Reuters) - Egypt has cancelled contracts for a total of 240,000 tonnes of Ukrainian wheat that were booked by its state grains buyer for February and March delivery but never loaded due to Russia's invasion of Ukraine, two people with knowledge of the matter said.

Reuters reported in May that about 300,000 tonnes of Ukrainian wheat bought by Egypt were stranded in Ukraine, with one cargo stuck in port and four others still to be loaded.

Egypt's General Authority For Supply Commodities (GASC) has released the trading companies supplying the four unloaded cargoes, Nibulon and Inerco, from their contractual obligations, the two sources said, despite there not being a force majeure clause in GASC's contracts.

Force majeure is a clause in contracts that frees parties from liability due to uncontrollable events. GASC had previously granted the trading houses an extension to provide the cargoes, if necessary from other origins.

Russia and Ukraine signed a deal last week to restart Black Sea grain and fertiliser exports blocked by the war. It was unclear whether the GASC contracts had been cancelled before the deal to resume shipping was agreed.

Egypt, typically the world's largest wheat importer, depended heavily on shipments of Black Sea wheat that were disrupted by Russia's Feb. 24 invasion.

It has since sought to diversify wheat supplies, buying more than a million tonnes in July through tenders and direct purchases in an effort to boost its strategic reserves.

The four cancelled cargoes were bought in December at prices ranging between $346 and $360 per tonne, including shipping costs, traders had said at the time. After the war sped up rises in global grain prices, GASC paid as much as $494.25 per tonne of wheat in April.

© Reuters. FILE PHOTO: Stalks of wheat are pictured in a field in Al Qalyubia Governorate, Egypt, May 19, 2022. REUTERS/Mohamed Abd El Ghany

The fifth loaded cargo is stuck at Ukraine's Chornomorsk Port but is expected to sail once it has the green light from port officials, according to traders.

Turkish Defence Minister Hulusi Akar unveiled a centre in Istanbul on Wednesday that would oversee the export of Ukrainian grains, with the first shipment expected to depart from Black Sea ports within days.

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