Egypt in talks to replace detained Ukraine wheat cargo, sources say

Egypt has been negotiating to replace a detained Ukrainian wheat shipment, two people with knowledge of the matter said, after talks to release the vessel carrying it proved unfruitful.

The cargo of about 60,000 tonnes of Ukrainian wheat is currently aboard a ship called Emmakris III that was detained in July at the request of Ukraine’s prosecutor general to investigate its alleged Russian owner.

The company that Ukrainian officials identified as the owner did not respond to several requests for comment.

The cargo was purchased by Egypt’s state grains buyer, the General Authority for Supply Commodities (GASC), in a December tender for shipment in February but has been stuck at the port of Chornomorsk since Russia’s invasion of Ukraine on Feb. 24.

In August, Ukraine’s Middle East envoy said Ukrainian officials were working to release the ship but three people with knowledge of the matter said that the vessel was still being investigated.

Following Russia’s invasion of Ukraine, GASC initially granted an extension to secure the cargo but was not offering trading companies any force majeure release from contractual obligations, a clause in contracts that frees parties from liability due to uncontrollable events.

In the case of inability to deliver a cargo, GASC’s tender book requires suppliers to fulfil contractual quantity from an alternative origin as GASC’s tender book does not contain a provision for force majeure.

GASC, however, did release suppliers of four Ukrainian wheat cargoes bought before the war but never loaded on a vessel from their contractual obligations in July.

A report by Egypt’s state news agency that quoted Supply Minister Ali Moselhy agreeing to receive 63,000 tonnes of wheat referred to the replacement shipment, one of the sources said.

Egypt, typically the world’s largest wheat importer, depended heavily on shipments of Black Sea wheat that were disrupted by Russia’s invasion of Ukraine.

It has since sought to diversify wheat supplies, buying more than 2 million tonnes since June through tenders and direct purchases in an effort to boost its strategic reserves.

Egypt’s strategic reserves of wheat currently stand at 6.7 months.

Tags: Ukraine, Russia, Egypt, grain