Egypt's state-owned Food Industries Holding Company cancelled its tender on Tuesday for vegetable oils, citing a lack of offers following new terms that allow the state buyer to delay payments, traders said. The vegetable oil tender was the first FIHC held under new payment terms that allow the state buyer to defer opening a letter of credit, used for payments, by 180 days, one trader said.
FIHC was seeking 15,000 tonnes of sunflower oil and 25,000 tonnes of soybean oil for arrival April 1-20 or May 1-20. Only one offer was presented for sunflower oil while two were presented for soybean oil. FIHC did not say when a new tender would be held. Last week, Egypt's state grain buyer, General Authority for Supply Commodities (GASC), made a similar change to terms of payment for the wheat it purchases in its tenders.
Egypt has been facing a foreign currency shortage that has caused letters of credit to be delayed and goods to pile up at ports. Egypt's foreign currency reserves have halved to $16.4 billion since 2011 as imports greatly outpace exports. The popular uprising in the country in 2011 scared off foreign investors and tourists that are the country's major sources of foreign currency.
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