The action came as per the directives of President Abdel-Fattah El-Sisi to facilitate local wheat supply procedures amid the ongoing global crisis, the minister said.
The General Authority for Supply and the Agriculture Bank of Egypt will disburse this allocation as down payments to farmers, as the wheat harvest season began on 1 April — two weeks ahead of schedule.
Maait expounded that the government targets supplying roughly six million tonnes of local wheat at a total cost of EGP 36 billion in 2022, adding that the price of local wheat supply has increased by EGP 1,100 per tonne in 2022 compared to 2021.
The Cabinet said in March that it will extend an incentive valued at EGP 65 per ardeb (One ardeb is equivalent to 150 kg) to incentivise farmers to increase the wheat quantities they sell to the Ministry of Supply and Internal Trade.
“The finance ministry is following up with the supply ministry on the daily local wheat supply situation, through which it is providing sums to finance further procurement for the sake of providing sufficient liquidity to farmers’ dues immediately,” said Maait.
Egypt is the largest importer of wheat globally with a total of 12 to 13 million tonnes of wheat imports per year, according to the Observatory of Economic Complexity (OEC) in 2020 — an online data visualisation platform focused on the geography and dynamics of economic activities across the globe.
As per the UN’s Food and Agriculture Organisation’s (FAO) data, Egypt imports over 80 percent of its needs of wheat from two key markets - Russia at 50 percent and Ukraine at 30 percent.
However, Egypt exported wheat in 2020 with a total cost of about $5 billion, according to the OEC, with Japan, Australia, the UAE, Canada, and Belgium being the primary markets of Egyptian wheat.
The minister explained that the state’s budget is able to deal positively and flexibly with the ongoing global economic crisis, pointing out that the government’s priorities in this regard is sustaining the strategic stockpile of wheat and fulfilling citizens’ basic needs amid the current exceptional position of the global economy.
In March, Maait said that the global wheat price in global markets - especially due to disruption in wheat supply lines from Baltic countries amid the ongoing Ukrainian-Russian war - is anticipated to push up the cost of Egypt’s imports of the strategic commodity by about EGP 12 to 15 billion.
The minister also noted that Egypt will have enough wheat reserves to cover eight months of the local market’s needs after the local harvest is delivered by mid-April.
To cope with the ongoing crisis, Egypt’s government seeks to import wheat from alternative markets, such as India — the second largest wheat producer globally — to fulfil domestic market needs.
Moreover, Egypt’s Ministry of Trade and Industry banned in March the export of wheat, fava beans, lentils, pasta, and all kinds of flour for three months from April to June.