Egypt swaps out Russian wheat after Moscow objects to pricing

Egypt will switch to sourcing almost half a million tons of wheat from France and Bulgaria, after Moscow blocked the supply of Russian grain, according to people familiar with the matter.

Moscow objected to the pricing of the bumper deal, the people said, asking not to be identified as the matter is private. It’s the second time in the past few months that the purchase of Russian wheat by Egypt’s state-run buyer has been thrown into turmoil as authorities in Moscow try to enforce an unofficial price floor, Bloomberg reports.

Egypt’s General Authority for Supply Commodities agreed to buy 480,000 tons of Russian wheat in direct negotiations, Supply Minister Ali El-Mosilhy said at the beginning of September. That deal was booked at $270 a ton including freight — lower than the unofficial price floor Russian officials were trying to implement at the time. Days later, Egypt said that crop trader Solaris would be allowed the option to supply grain from any origin.

Solaris and Russia’s agriculture ministry didn’t immediately respond to requests for comment.

Russia’s grain ports are overflowing after two consecutive bumper harvests, making it the dominant shipper and price-maker in the global market. However, the supply glut is putting pressure on local prices, prompting officials to enforce a floor to shore up the market. The application of that price limit has been inconsistent.