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|15 October, 2018

Egypt talking to banks about hedging for commodities

Egypt is in the early stages of talks with international banks over a plan to hedge against the global rise in commodity prices

An Egyptian farmer carries a bundle of freshly harvested wheat during the launch of the Government's local wheat harvest at a field at Beni Suef, south of Cairo, south of Cairo, Egypt April 24, 2017.

An Egyptian farmer carries a bundle of freshly harvested wheat during the launch of the Government's local wheat harvest at a field at Beni Suef, south of Cairo, south of Cairo, Egypt April 24, 2017.

REUTERS/Amr Abdallah Dalsh

CAIRO - Egypt, the world's largest wheat importer, is in the early stages of talks with international banks over a plan to hedge against the global rise in commodity prices, a government source said on Monday.

"We are not in advanced talks...we are surveying, taking presentations, not more than that," the source said, adding that there was no deadline set for the completion of the talks.

Egypt's Finance Minister Mohamed Maait said in September his country was ready to implement an oil hedging policy but was waiting for the market to cool off.

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Another government source earlier on Monday said that Egypt was also talking to banks over a scheme to hedge against the rise in wheat prices but did not give further details. 

"There are many units in many ministries working on this," the first government source said. "A unit in the finance ministry is studying the potential for hedging the price of oil and basic commodities."

Cairo spends around $1.5 billion annually on wheat imports to stock a sprawling bread subsidy programme relied on by tens of millions of Egyptians.

(Reporting by Nadine Awadalla and Ehab Farouk Writing by Maha El Dahan Editing by Louise Heavens and Kirsten Donovan) ((Maha.Dahan@thomsonreuters.com; + 9712 4082101; Reuters Messaging: maha.dahan.thomsonreuters.com@reuters.net))