Increasing cost of imported wheat and oil imposes burden on state’s budget: Maait

Jehad El-Sayed, Tuesday 5 Jul 2022

The prices of imported wheat and oil have hiked, which poses a burden on the state’s finances and budget, Minister of Finance Mohamed Maait said on Monday, asserting that the Ministry of Finance is managing the country’s financial matters under pressure.

Maait
Minister of Finance Mohamed Maait.Photo: Al-Ahram

 

During a phone interview with Hadrat Al-Muwatin programme on Al-Hadath Al-Youm channel, Maait stated that the price of a tonne of imported wheat noticeably increased to $504 from $130, which puts pressure on the state’s finances, especially since Egypt is the largest importer of wheat in the world.

He added that the country imports 12 million tonnes of wheat annually, and this huge difference in international prices places immense pressure on the state’s budget. 

This comes in addition to the increase in the price of a barrel of oil from $65 to $125.

“We import approximately 120 million barrels of oil annually,” he said.

Furthermore, the finance minister called on citizens and the government to unite to see the bigger picture of the financial state, both internally and externally. 

Egypt — one of the world’s largest wheat importers — has in recent years imported nearly 80 percent of its grain from Russian and Ukraine through the Black Sea due to its high quality, competitive pricing, and the two countries’ geographical proximity.

On the heels of the supply chain disruptions caused by the ongoing Russian-Ukrainian War, Egypt is diversifying its import sources, at the top of which is India, which has exempted Egypt from its recent wheat export ban.

In 2020, Egypt imported 12.8 million tonnes of wheat at a cost of about $3.2 billion, according to the Central Agency for Public Mobilisation and Statistics (CAPMAS).

Given the war has raised the cost of importing wheat worldwide, Egypt has sought to increase local production, aiming to collect six million tonnes of the strategic crop throughout August, up from the 3.5 million tonnes collected in 2021.

Additionally, Minister of Supply and Internal Trade Aly Moselhi said in late June that the government has already received a total of more than 3.9 million tonnes of wheat from local farmers during this wheat supply season — an increase of 10 to 12 percent from last year.

The minister also said that the wheat supply season, which started in April, will continue until the end of August.

Moreover, he affirmed that the country has a strategic stock of wheat sufficient for nearly 5.7 months.

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