Egypt looking into paying for Russian wheat in roubles

An Egyptian farmer holds wheat crops on a farm in Beni Suef, 75 miles, (120 kilometers), south of Cairo, Egypt. (AP)

Egypt, the world's largest wheat importer, is studying a proposal put forward by some Russian grain exporters to pay for Russian wheat in roubles, the country's supply minister said on Monday.

"It was a suggestion made on their part and it is being studied," Khaled Hanafi told Reuters.

The proposal comes days before Russia launches a new wheat export tax, which traders say could threaten profits on advance contracts for the new crop if the rouble weakens in coming months.

The new Russian tax, to be launched from July 1, is set at 50 percent of the customs price per tonne minus 5,500 roubles ($102), but not less than 50 roubles per tonne.

None of the Russian grain exporters, contacted by Reuters, were aware of this proposal for Egypt and some of them doubted that the project would be viable.

"The payment in roubles would ease the risk of currency volatility for Russian suppliers, but the question where Egypt would find the roubles to pay remains in place," one of Moscow-based traders said.

The idea was put forward during a recent visit to Russia by the Egyptian Trade Minister Mounir Fakhry Abdel Nour, a trade ministry source said.

"The results of the visit are going to be discussed in the cabinet meeting today and if there are any offers concerning wheat imports it will be submitted to the supply ministry and the General Authority for Supply Commodities," the trade ministry source said.

Egypt is one of the largest buyers of Russian wheat along with Turkey and Iran.

The rouble fell sharply against the dollar in 2014 and is yet to fully recover.

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Last Update: Wednesday, 20 May 2020 KSA 09:45 - GMT 06:45
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