Ever since the disruption of supply of Black Sea wheat after the Ukraine war broke out on 24 February, Egypt has scrambled to find viable import alternatives to secure the strategic commodity.
As typically the largest wheat importer in the world, Egypt relies on 14 countries for wheat imports, including Russia, Ukraine, Romania, the US, France, and Kazakhstan, Minister of Supply and Internal Trade Mohamed Moselhi said in February, days after the invasion. However, Russia and Ukraine alone account for 80 percent of the country’s imported wheat supply.
Annually, Egypt spends tens of billions of pounds to secure nearly 20 million tonnes of local and imported wheat, a key strategic commodity for the production of loaves of bread — a staple of everyday Egyptian diet and cuisine for tens of millions of citizens.
In 2020, Egypt imported 12.885 million tonnes of wheat at a cost of about $3.2 billion, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS).
In the meantime, Egypt has a strategic reserve of wheat that can cover domestic consumption for four months without accounting for the yield of the ongoing local wheat harvest season, according to the cabinet media centre.
The country has begun working on two avenues to ensure its annual needs for wheat are covered. The first is finding new international sources of wheat supply, and the second is taking a number of measures to ensure it collects the largest possible amount of wheat from local farmers.
Indian wheat ban, uncertainty
In the face of wheat supply shortages, Egypt announced in April plans to import wheat from India — the world’s second-largest wheat producer — for the very first time.
The shipments, according to a supply ministry official last week, would have comprised more than 60,000 tonnes.
On 13 May, however, India restricted wheat exports to maintain availability of the food grain locally and to curb price hikes amid a scorching heat wave that curtailed the Asian country’s output.
In a statement, India’s Directorate General of Foreign Trade (DGFT) said that wheat exports would only be allowed to other countries to meet their food security needs after permission by the Indian government and based on requests by those countries’ governments.
At least a dozen countries have submitted diplomatic requests for more Indian wheat shipments, an official told Hindustan Times last week on condition of anonymity, without naming the countries.
Later, India slightly relaxed the restrictions on wheat exports, saying that wheat consignments delivered to customs for examination on or before 13 May could proceed to their destination.
Despite this, 17,160 tonnes were cleared by customs post-ban of the total shipments bound for Egypt from India, according to Indian local reports.
Amid uncertainty on whether Egypt will be exempted from India’s restrictions, Moselhi announced at a press conference earlier in May that the ban will not affect any agreements already signed by the Egyptian government and India on wheat purchase.
“For India, we are talking with them on the basis of a government agreement,” Moselhi said, stressing, “the ban does not apply to governments, including the government of Egypt.”
Moselhi’s assurances come amid reports that negotiations are still underway between Egyptian and Indian officials on the future of Indian exports to Egypt.
Importing Russian, Ukrainian wheat
Additionally, despite the Russian-Ukrainian war, Egypt has not decided to stop importing wheat from the two warring countries.
In fact, Egypt has contracted to purchase more wheat from Russia after the outbreak of the war.
Ukrainian suppliers have offered to dispatch wheat shipments to Egypt via rail through Poland, Moselhi said on Thursday.
Four traders told Reuters last week that around 300,000 tons of Ukrainian wheat bound to Egypt in February and March are yet to be shipped due to the Russian invasion.
One of the five cargos is stuck in a Ukrainian port, while the others are yet to be loaded. All these five cargos were purchased by Egypt before the invasion.
Egypt’s wheat imports from Ukraine dropped by 42 percent in March Y-o-Y to 124,500 tonnes, according to freight data seen by Reuters.
Due to the invasion, Ukraine has been forced to send the wheat shipments across the country's western border using its limited railroad capacity and small Danube River ports.
On the other hand, Egypt’s wheat imports from Russia increased in March to 479,195 tonnes, up by 24 percent from the same month last year.
In February, Moselhi said Egypt’s pre-war contracts to import wheat from Russia and Ukraine are still valid, stressing that both countries are trying to fulfil these commitments.
Augmenting local supply
As of the 2021/2022 season, Egypt has a total of 3.65 million feddans of cultivated wheat.
The government seeks to collect six million tonnes of the crop from farmers in 2022, up from the 3.5 million tonnes collected in 2021, Minister of Agriculture El-Sayed El-Quseir said in April.
Egyptian officials have repeatedly offered assurances that the country’s needs of wheat would be met until the end of 2022 after receiving local supplies from the current harvest season.
In a bid to encourage farmers to supply the largest amount of wheat to the state, the government has offered monetary incentives to farmers and has also started the wheat season two weeks earlier than its usual timing in mid-April.
The government, which has allocated EGP 36 billion to purchase six million tonnes of local wheat, now pays wheat farmers an additional EGP 65 on each ardeb to sell for EGP 885. (1 ardeb is equivalent to 150kg)
Consequently, the government has been able so far to collect 2.14 million tonnes of wheat from farmers since the beginning of the ongoing local wheat harvest season that will conclude by the end of August, Madbouly said last week.
Expanding wheat cultivation
Egypt also seeks to move towards self-sufficiency in wheat by raising domestic wheat output to 65 percent in 2025, up from the current 45 percent, Minister of Planning and Economic Development Hala El-Said told the House of Representatives earlier this month.
To achieve that end, Egypt launched national projects to increase wheat fields by tens of thousands of feddans across the nation and the country’s wheat storage capacities.
The government has so far managed to increase the total areas cultivated with wheat in 2022 by 220,000 feddans — primarily in the Toshka El-Kheir and Sharq El-Owainat projects — reaching a total of 3.65 million feddans, Minister Moselhi announced in February.
Furthermore, on Saturday, President Abdel-Fattah El-Sisi inaugurated ‘Egypt’s Future Project’ for agricultural production in Cairo, which will contribute to producing multiple crucial agricultural crops for the country, including wheat.
Given the current circumstances, the president urged the authorities involved to complete the three-stage project, which comprises over a million feddans, by 2023 — a year earlier from the initial deadline of the project.
“We cannot wait until 2024… We should push ourselves a bit harder in light of the current circumstances… Why would you deprive us from 400,000 feddans [in the last stage of the project] that, when wholly cultivated, can produce no less than a million tonnes of wheat?” El-Sisi said.
The Egypt’s Future Project that is located along Cairo’s Dabaa Axis Highway in the country’s north-west is part of the larger New Delta Project. The larger project is being implemented over an area of around 2.2 million feddans and aims to maximise local production of wheat and other crops.
In April, El-Sisi signalled the beginning of the wheat harvest season in Toshka’s agricultural lands in the Upper Egyptian governorate of Aswan. The Toshka project is expected to help the country achieve self-sufficiency in wheat.
Moreover, the state has been implementing a national silos expansion project since 2015 to boost the strategic storage capacity of grains, especially wheat, and has constructed a total of 73 silos so far in 21 governorates.
This has effectively increasing the wheat storage capacity to 5.5 million tonnes, up from around 1.4 million tonnes before 2014, Madbouly said in remarks in mid-May.
Moselhi asserted in April that the government seeks to increase the strategic wheat storage capacity by building another 60 silos in the coming period with a total capacity of 600,000 tonnes.
The national project for silos aims to eliminate the quantitative and qualitative waste of grain, which amounts to 15 percent due to storage in open barns instead of silos, according to the State Information Services (SIS).
Egyptian officials have repeatedly reassured the public that Egypt will not experience a wheat supply crisis before the end of the year, given its increase in locally cultivated wheat and its plans to diversify import sources.
However, with no signs of the Ukraine war coming to an end soon, Egypt will have to find a long-term solution to secure a sustainable supply of wheat for its population.