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Egyptian Wheat Importers Face Supply Crisis

Egyptian Wheat Importers Face Supply Crisis


Egyptian Wheat Importers Face Supply Crisis

Article by: Hari Yellina

After the Ukraine crisis damaged its main source of grain, Egypt, the world’s biggest importer of wheat, is scurrying to locate alternate suppliers. Over the last ten years, Russia and Ukraine have commanded the lion’s share of sales to Egypt, but Egypt is increasingly casting its net wider. According to official data, Russia has supplied roughly 50% of Egypt’s needs in recent years, while Ukraine has supplied 30%. The Egyptian government is concerned about rising worldwide wheat prices, which are putting a strain on the country’s widely used domestic food subsidy programme. The world’s largest wheat tender, operated by Egypt’s General Authority for Supply Commodities (GASC), is now in disarray, with no bids received in February for deliveries between April 13 and 26.

Because of the war, Ukrainian exports are unable to take place, and there is anxiety about Russian product transportation routes, even in nations that do not embargo the country. There have been successful bids in recent contracts from France, which is a frequent supplier of wheat to North Africa, as well as the United States, which is unusual. Since the last tender, wheat prices have risen dramatically. Egypt might look to Australia for alternative supplies, but while our wheat is inexpensive on the global market, we don’t have enough export capacity to process new orders until at least the end of April.

The Egyptian government claims to have a five million tonne wheat stockpile, enough to last nine months, but markets have historically regarded stock claims with scepticism, assuming stocks may be over-inflated as a negotiation weapon.

Focus on Egypt

According to the International Grains Council (IGC), Egypt’s total grains production in 2021-22 will be 16.9 million tonnes, unchanged from 2020-21. Production of wheat is put at 8.9 million tonnes, also unchanged. The country’s maize crop is estimated at 7.1 million tonnes, again the same as the previous year. Egypt also is estimated to have produced 700,000 tonnes of sorghum, the same as in 2020-21. Egypt’s total grains imports in 2021-22 are forecast at 23.8 million tonnes, up from 22.9 million the year before.  Imports of wheat are put at 13.2 million tonnes, up from 12.8 million the previous year. The country also is expected to import 10.4 million tonnes of maize, up from 10.2 million in 2020-21. The IGC’s projection for rice production in 2021-22 is 3.5 million tonnes, revised down in July from the previous forecast of 4 million. Rice imports in 2020-21 were 4 million tonnes.