200,000 tons of Ukrainian wheat stuck in Egypt as traders await payment for state contracts

Eight vessels carrying Ukrainian wheat remain anchored off Egyptian ports due to delays in opening letters of credit for the state buyer Mostakbal. About 200,000 tons of grain remain unpaid for, with most contracts signed back in September, market sources told Latifundist.com.

Background. Earlier, Fastmarkets reported that the delays were linked to Egypt’s new state grain procurement system, now handled by Mostakbal Misr (Future of Egypt) instead of the former operator, GASC.

According to Fastmarkets, the issues may stem from a change of bank, unusually long letter of credit terms (up to 270 days), and the involvement of private intermediaries such as Isotech, which complicated the payment chain. Some vessels have reportedly been stuck at port for more than a month (since September 11–12).

Christina Serebriakova, broker at Atria Brokers and CEO of ASAP Agri, told Latifundist.com that the first signs of trouble appeared in early October, when Egyptian demand disappeared for about a week. According to her, traders later discovered that Egypt was facing technical difficulties with opening letters of credit — bank guarantees for payments on delivered grain.

“In early October, we saw Egyptian demand disappear for at least a week, and it became clear something was wrong. We found out there were problems with opening letters of credit. As a result, up to 15 vessels were stuck at anchorage, which immediately pushed local prices down,” said Serebryakova.

She added that about eight vessels carrying a total of 200,000 tons remain unpaid for, though traders expect the situation to be resolved soon.

“We hope these issues will be settled by the end of October, and that from next month we’ll see Egypt returning to the market at logical price levels,” she noted.

Among the companies affected is Qortia AG. Co-owner Kostiantyn Kuflik said the company has been executing Mostakbal’s state contracts for wheat supplies for some time.

“We had six vessels under Mostakbal contracts caught in this ‘traffic jam.’ Two have been fully discharged, one is currently unloading, two remain at anchorage, and one we removed from the queue and sent later,” he said.

According to him, the company works directly with the state buyer, without intermediaries. All contracts are backed by letters of credit, but Egyptian banks are not adhering to standard processing timelines.

“Under international practice, a bank must respond within five working days after document submission. But that’s not happening. The Egyptian side delays confirmation, citing internal checks or technical issues. As a result, payments are stalled and vessels are simply waiting,” Kuflik explained.

He added that demurrage for vessel delays is not being compensated, putting the financial burden on traders.

“We are gradually closing all settlements. Despite the difficulties, we’ve met all our obligations to partners. Together with our Egyptian colleagues, we’re working to resolve the issue soon and restore the normal payment system,” he added.

Partial payment recovery has also been reported by Oleksandr Yanev, co-owner of Zaria Trade. According to him, partners have already made about half of the payments and promised to settle the rest soon.

“So far, we’ve received around 50% of the payment, and our partners assure us they’ll complete the settlement in the coming days. This allows us to plan ahead, cover our costs, and resume regular operations,” Yanev said.

He believes the delays are technical in nature.

“The issue lies in a bank change within Egypt. All payments go through letters of credit, and when the bank, currency, or payment policy changes in that chain, delays naturally occur. Letters of credit are a slow instrument, so such situations aren’t unusual for the region,” he explained.

“This time, several factors coincided: a bank change, domestic challenges, and a high volume of transactions. The Egyptians simply took on more than they could process quickly. So the delay is more of a technical issue than a default or intentional payment block,” Yanev concluded.