In its newsletter this week, the cabinet’s Information and Decision Support Centre reported that the UN Food and Agriculture Organisation’s (FAO) Food Price Index had hiked by 17.1 per cent month-on-month in March due to the surge in global prices of wheat, corn, and plant oils as a result of the Russia-Ukraine war.
The two countries produce about 50 per cent of the world’s wheat exports, 30 per cent from Russia and 20 per cent from Ukraine, according to data released over the past three years.
North Africa is the world’s leading wheat importer, with Egypt topping the list followed by Algeria and Morocco and most imported wheat being used to make bread, the region’s staple diet.
Egypt received 80 per cent of its wheat imports from Russia and Ukraine last year due to its high quality and competitive pricing and the two countries’ geographical proximity. Imported wheat is shipped via the Black Sea to the Mediterranean, a journey that takes about 10 days until its arrival at Egyptian ports.
Wheat imported from the US takes about 24 days to arrive, with 28 days being usual for wheat shipped from Argentina.
Even with the onset of the Russian incursion into Ukraine on 24 February and the postponement of Ukrainian wheat imports via the Black Sea, Egypt’s wheat imports from Russia still reached 479,195 tons in March, recording a 24 per cent increase over the same month last year.
Although the Western sanctions on Russia exclude food, traders say that the banks are reluctant to finance wheat imports from Russia. “Importers are still ‘trying to figure out a secure channel for payments of already-delivered Russian cargoes,’ said one trader who imports to Egypt,” Reuters reported.
In their search for alternatives to Russian and Ukrainian wheat, traders “have secured unusual wheat shipments from France, Brazil, Lithuania and Bulgaria,” according to Reuters. It added that “they are also expecting a rare shipment from Germany, which traders say hasn’t supplied Egypt for several years.”
The cabinet centre’s newsletter reported that the General Authority for Supply Commodities, the state’s official wheat buyer, has cancelled two tenders to buy wheat due to rising prices since 24 February.
In the first week of May, Egypt signed a deal to import 61,500 tons of Indian wheat.
Ahmed Al-Attar, head of the Agricultural Quarantine Authority, said the Indian wheat shipment that arrived in Egypt was imported by the private sector.
A second shipment, imported from India on 20 May, was organised by the state, as Egypt’s government is one of those exempted from India’s ban on wheat exports. Al-Attar added that the government is engaged in negotiations with India to import more wheat.
Abbas Al-Shennawi, head of the Agricultural Services Sector who supervises wheat supply at the Ministry of Agriculture, said the wheat harvest this year would continue until the end of August and not until 15 July as usual. He pointed out that the majority of governorates have supplied about 50 per cent of the targeted sum so far.
The Lower Egyptian governorates have the largest share of areas cultivated with wheat, he added. The Kafr Al-Sheikh, Sharqiya, Beheira, and Daqahliya governorates contain about 35 per cent of land cultivated with wheat in Egypt.
The target this year is to receive 5.5 million tons of homegrown wheat, Al-Shennawi said.
Nader Noureddin, an agricultural expert, believes it is unlikely that India will be a permanent source of imported wheat for Egypt. “India is a temporary supplier of wheat, although it is the second-largest global producer. Its huge population of more than 1.3 billion people consumes all its production, though every few years India exports small quantities not exceeding five million tons. As Egypt imports 13 million tons of wheat a year, India cannot be relied upon as a permanent source of imports,” he said.
“Russian wheat remains the most available and cheapest option. Egypt and the majority of Arab countries will continue to rely on Russian wheat, the imports of which will increase due to the closure of Ukrainian ports.”
Noureddin lauded the decision to diversify wheat imports and to buy wheat from the US, Canada, Argentina, France, Romania, Hungary, Australia, and Kazakhstan. “The problem is not the amount of wheat, but its high price, together with the cost of freight and unloading due to rises in oil prices,” he said.
*A version of this article appears in print in the 26 May, 2022 edition of Al-Ahram Weekly.