The Egyptian Ministry of Industry and Foreign Trade issued the first tender for rice export licenses since the export ban was officially lifted earlier this month.
THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
GAIN Report Number:
First Tender for Rice Export Licenses
Grain and Feed
Jonathan P Gressel
Dr. Salah Mansour
The Egyptian Ministry of Industry and Foreign Trade issued the first tender for rice export licenses
since the export ban was officially lifted earlier this month. The initial tender is for 100 TMT of export
licenses with a maximum quantity of 15 TMT for any one license. Licenses are only for milled rice.
No minimum price for export licenses was announced, although the GOE has the right to refuse the
offers. The export license fee is in addition to the LE 1000/MT ($164) export tax. This appears to be
the first time that Egypt has used a tendering system for export licenses and we expect that traders will
be cautious in their bidding. The bids will also be influenced by whether the Government of Egypt
begins to crack down on the substantial contraband trade in rice. Bids are due on October 18th and the
results will be announced on October 21st.
On October 14, 2012, the Ministry of Industry and Foreign Trade (Foreign Trade Sector) issued the first
tender to issue licenses for traders to export rice (No. 1 for 2012). This first tender is for 100 TMT and
the last day for submitting offers is October 18. The results will be announced on Sunday October 21st.
The technical and financial offers should be submitted separately. The maximum amount that the
trader can submit an offer for and get a license for is 15 TMT. The bid should include the quantity that
the exporter wants to get license for and the bid value in Egyptian pound (LE). The committee has the
right to increase, decrease, or cancel the quantity submitted by the bidder. The only allowed type for
bidding is milled rice (HS code # 1006.30). The bidder should submit one price only. Exportation
should be completed by November 30, 2012 or the license will be canceled unless it is already
registered and the export fees are fully paid for the whole amount. If the shipment is canceled, the
bidder has no right to ask for a refund. The bid bond is LE 10/ton and the performance bond is for 10%
of the export license fees. ($1.00 = LE 6.08)
It will be interesting to see how much traders are willing to pay for the export licenses. This appears to
be the first time that Egypt has used a tendering system for export licenses and we expect that traders
will be cautious in their bidding. Currently paddy prices are about LE 1700/MT ($280), although the
Government of Egypt has set a price of LE 2000 ($330). The $280/MT paddy price is equivalent to
$406/MT on a milled basis. Exporters must pay a LE 1000/MT ($164) export tax. Egyptian rice traders
indicate that U.S. Calrose is selling for about $900/MT, CIF in the region. They expect to discount
Egyptian rice by $70-80/MT to Calrose.
It will also be interesting to see what happens with the substantial contraband trade now that the export
licensing system is established. Between the export tax and the export license fee, there does not appear
to be much incentive for those that have been able to successfully ship contraband rice, despite the
export ban, to change tactics. Unless the GOE is able to successfully crack down on the contraband
trade, there appears to be little incentive to pay high prices for the export licenses.