Egypt State Grain Buyer Steps Aside As Currency Reserves Fall

One of the most powerful figures on the global wheat market, Nomani Nomani, said on Wednesday he has left his job as vice chairman of Egypt’s state grains buyer GASC, at a time when the country is struggling with falling foreign currency reserves.

For more than three years he has overseen strategic buying for the world’s biggest importer of wheat, encompassing Egypt’s 2011 revolution and the periods of political and economic uncertainty since the fall of president Hosni Mubarak.

The Islamist government of President Mohamed Morsi government stressed on Wednesday that the country had ample stocks to produce bread, the national staple, and grains traders reported no significant disruption to Egyptian payments despite a severe shortage of foreign currency.

Nomani gave no reason for his move beyond saying it was a promotion. “I got promoted to become an adviser to the minister of trade and supplies, which means that I will no longer handle the wheat bidding and buying process, starting now,” Nomani told Reuters.

Nomani said Mamdouh Abdel Fattah had taken over as acting deputy head of the GASC (General Authority for Supply Commodities) for a period of one year, but it was not yet clear if this was renewable or not.

Fattah is career civil servant who has worked at GASC since the 1980s but had not until now been directly involved in the wheat buying process. His previous position was as a senior aide to the minister of trade and supplies, responsible for purchase and distribution of products.

HARD ACT TO FOLLOW

European grains traders expressed disappointment at Nomani’s departure but said they saw no major problems with Egypt funding its grains purchases.

“Mr Nomani is a very hard and effective worker who won a lot of trust in the market. An era will change and it will be a hard act to follow,” one trader told Reuters.

Another pointed to the importance of maintaining affordable food supplies at a time of political conflict between Morsi’s government and the liberal and leftist opposition.

“Large and continued wheat imports to supply the Egyptian state rationing scheme are a key factor in keeping the Egyptian public happy with cheap bread and I think the government will put top priority on keeping imports high,” the trader said.

“I have seen some minor delays in the Egyptian private sector with some buyers struggling to get letters of credit operational. There were delays for 4-5 days, but this is not all that much of an issue.”

Egypt’s foreign currency reserves have fallen to $13.6 billion, less than the $15 billion needed to cover three months’ worth of imports. In an attempt to control the rate of a drop in the Egyptian pound’s value, the central bank introduced regular dollar auctions in December.

The Egyptian economy has been hit by more than two years of turmoil since the popular uprising that swept Mubarak from power. The unrest has driven away tourists and investors.

Central bank governor Hisham Ramez said this week that he had taken steps to prioritize certain imports including foodstuffs, production machines and their spare parts, and fertilizers.

The cabinet said on Wednesday that Egypt already had stocks of wheat to last 101 days and this would rise to 126 days as more imports arrive.

GASC set a tender on Tuesday to buy an unspecified amount of wheat from global suppliers for April 10-20 shipment.

Reuters