Egypt resumes talks about Russia’s customs union

MOSCOW – The Egyptian Industry and Investment Minister Mounir Fakhry Abdel Nour underlined that during his talks with the Russian side in Moscow to discuss the matter relating to the establishment of a free trade area in conjunction with the Customs Union, saying that the discussion of this issue is one of the important achievements in the talks.

 “There were talks about this creation of the free trade zone with Egypt before 2011… Now we have agreed to resume these negotiations and to discuss sectors of cooperation,” Russian Agriculture Minister Nikolai Fydorov said.

“The final decision will be made after the presidential election campaign in Egypt, official documents will be appearing after it,” he told reporters in Moscow after the meeting of the Russian-Egyptian commission for trade development.

 Mr. Abdel Nour said the agreement on free trade with the customs union could contribute to expanding cooperation between two countries.

He added that the officials have also discussed a number of joint projects, including supplies of Russian liquefied natural gas and other commodities.

He mentioned an aluminium plant, a hydro power plant, and projects related to the light metro in Cairo and grain storage. He did not specify what form Russia’s involvement could take.

 The customs union of Russia, Belarus and Kazakhstan, Egyptian and Russian officials said on Wednesday.

 Egypt is already the largest importer of Russian wheat, buying one fifth of the country’s exports of this commodity so far in 2013/14. It bought 2.6 million tonnes of Russian wheat between July 1 and the end of February.

 “You [Russia] have expressed your wish to expand exports, primarily of wheat… and we want to develop exports of vegetables and fruit. It would help widen our cooperation,” Abdel Nour told the meeting.

Officials did not provide any other details on how Russian wheat exports could be increased.

It is unlikely that the countries will reach a major long-term wheat supply deal — a possibility the market has repeatedly speculated on, although there might be other ways of a deeper cooperation, a trader said.

 “Egypt has often talked about these long term wheat deals before but no one believes anything practical will come out of it as it doesn’t make sense. Why would you lock yourself into a deal with certain prices and what if market prices go down after that, you are stuck paying the higher price?” the trader added.

Sh. Kh.