The United States Department of Agriculture has approved wheat exports to Egypt under a credit guarantee program, according to Ashraf Ezz Eddin, head of Egypt's commercial office in Washington.
The announcement marks the first time that Egypt has relied on the US agricultural export program during the current fiscal year. The program GSM 102, issues credit guarantees to encouraging the export of US agricultural products while providing competitive lines of credit for buyers.
The move comes asconcerns rise among creditors over Egypt's ability to meet its commodityneeds through traditional methods, such as tenders and letters ofguarantee, Ezz Eddin explained, adding that the GSM102 guarantees that 98 percent of the deal's valuewill be paid off.
According to the USDA, the contract between the US and Egypt is for nearly 60,000 tons of wheat, worth US$17.7 billion.
Ezz Eddin added that the amount of wheat, scheduled to be shipped in April, is very small compared to the amount that Egypt usually imports from the US.
Egypt is one of the world’s largest wheat importers. Most of the country’s wheat is imported from the US, Russia and Australia, and the country has been vulnerable to fluctuations in price due to drought, contamination and other supply issues.
Edited translation from MENA