Egypt Scraps AOS, Al Wehda as Wheat Suppliers After Cargo Delays

CAIRO (Capital Markets in Africa) – Egypt, one of the world’s largest wheat importers, removed two of its top suppliers from a list of approved sellers after repeated delays in delivering cargoes, according to an official with the state-run buyer.

Dubai-based AOS Trading DMCC and its Egyptian sister company Al Wehda will no longer be able to sell to the General Authority for Supply Commodities, said the official, who asked not to be named as the matter is private. The firms sold about 1.2 million metric tons of wheat in Egypt’s tenders last season, 18 percent of GASC purchases, according to data compiled by Bloomberg.

AOS failed to deliver some of the cargoes it sold last season despite several deadline extensions, the official said. Payment disputes and missed delivery windows mean that about four cargoes sold by AOS couldn’t be delivered, with two held back at Russian ports and two others in Egyptian silos, people familiar with the matter said earlier this year.

Egypt announced earlier Wednesday it had allowed GASC to purchase 120,000 tons of Russian wheat previously sold by AOS and Al Wehda from the original supplier, the official said.

GASC had been in talks with Glencore Plc and Bunge Ltd., the original suppliers of the two cargoes held back in Egyptian silos, to buy the cargoes directly from them, bypassing AOS, people familiar with the matter said last month. The two companies sold the grain to AOS, which in turn sold to GASC, but were never paid, the people said.

The delays forced Egypt, which relies on state-subsidized bread to feed its nearly 100 million people, earlier this year to tap international markets again to fill the gap.