MOSCOW, – Russian grain exporters will propose ways to reduce transaction costs for wheat payments to Egypt’s new commodity importer, the head of the exporters’ lobby group said in an interview with Dubai-based publication Asharq Business.
In Egypt, Mostakbal Misr for Sustainable Development, the development arm of the Egyptian Armed Forces, has taken responsibility for importing strategic raw materials, including wheat, replacing the General Authority for Raw Materials Supply.
“We have received confirmation of Mostakbal Misr’s powers and are now waiting for an invitation to the tender of the new agency,” Eduard Zernin, head of Russia’s Grain Exporters and Producers Union, said in an interview with Asharq Business.
“We have proposals on how to reduce transaction costs in grain settlements under the conditions of limited access of Russian grain exporters to the global financial system,” he added.
Exporters’ access to the global financial system is limited due to Western sanctions.
Zernin also said in the interview that high transaction costs for Russian wheat exporters were one of the factors affecting global prices.
Russia’s foreign trade has suffered from high international intermediary costs and significant payment delays due to Western sanctions imposed over its military actions in Ukraine.
Even banks in countries that actively trade with Russia are exercising caution in their dealings with Russian counterparts to avoid becoming targets of secondary sanctions.
Egypt, one of the largest wheat importers in the world, is among the top five Russian wheat importers. Zernin said Russian exporters were ready for fair competition in tenders under the new import authority.
Zernin said Russian exporters expected Mostakbal Misr to maintain the practice of financial guarantees developed for GASC tenders, such as letters of credit backed by one of Egypt’s largest banks.
“Deviating from the letter of credit form could increase the cost of Russian wheat due to increased financial risks, which they would like to avoid,” Zernin said. He said Russian exporters planned to meet with Mostakbal Misr in early 2025.
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