Egypt’s Supply Minister hinted to Reuters on Sunday but details about the name of the Abu Dhabi-based bank are yet to be revealed.
The move comes as Russia, its top supplier, blocked a deal to buy 480,000 tonnes of wheat because the price (US$270) was below the unofficial floor rate.
The move could, therefore, give Egypt a cheap alternative to grain from Russia, especially since the country plans to export a record volume of more than 10 million tonnes in 2023/2024.
According to the source, talks over the loan deal for purchases from Kazakhstan are in the early stages, with negotiations taking place over the price and quantities of wheat as well as the value of the loan.
As originally reported by Reuters, the price, loan value, and wheat purchase volume have yet to be defined, but some traders already believe that the operation promises to be logistically complicated.
The traders said they learned of the potential deal during a wheat tender on Wednesday by Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC).
They were told GASC was negotiating a price that could be lower than the unofficial price floor set by Russia’s government, which was believed to have been set at a free-on-board price of $270 per metric ton in the tender.
But they also cast doubt on the potential deal, saying that shipping wheat from Kazakhstan would be logistically challenging, requiring overland deliveries through other countries.
The unofficial price floor has proven a hindrance for both GASC and for Russian wheat suppliers who had upped sales of relatively cheap Russian grain to Egypt since the war in Ukraine broke out early last year.
Russia’s government has not officially confirmed the minimum price, seen by traders as a move to slow its huge wheat exports and prevent tight domestic supplies from pushing up bread prices.
However, since Russia’s agriculture ministry recently prevented the private sale of 480,000 tons of Russian wheat to Egypt on price flour, the country is seeking to diversify its sources of wheat purchases.