Tunisia's Banque Nationale Agricole (BNA) has reportedly opened letters of credit (L/Cs) for the country's state-owned grain importer, Office des Cereales (ODC), to release cargoes of grain stranded offshore the commercial port of Sfax.

State-controlled BNA stepped in to offer the L/Cs for the cargoes of wheat, barley and flour due to ODC's inability to pay as the grain importer struggles to do business in the worst economic conditions Tunisia has experienced since 1956 when it achieved independence from France.

Offshore Tunisia

Four foreign ships loaded with imported grain lie at anchorage offshore Sfax, unable to access the port and unload their cargo due to the inability of the cereals office to pay for these shipments.

The vessels arrived between 23 November and 18 December, each incurring daily penalties as they await authorisation to unload their cargoes.

General secretary of OCD's union, Adel Marzouk, said on 27 December that a fifth ship had arrived in Tunisian waters.

Economic downturn

Tunisia is facing its worst ever economic crisis after its economy contracted 8.8 per cent last year and the fiscal deficit reached a record 11.4 per cent.

The country's sovereign rating downgrade meanwhile now classifies the country as insolvent, prompting foreign suppliers to demand immediate payment.

L/C preferences

Local law prohibits the export of foreign currency from Tunisia to pay for imports prior to the presentation of bank documents confirming that the merchandise was shipped to the country.

Exporters selling to customers in Tunisia have tended to use confirmed irrevocable L/Cs or L/Cs that authorise payment against documents.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.