Egypt gives notice for withdrawal from UN grain treaty

Ahram Online , Friday 10 Mar 2023

The Egyptian government has given notice that it will withdraw from the United Nations Grains Trade Convention (GTC) by the end of June 2023, according to the official website of the multinational treaty.



The GTC, which includes all grain exporting and importing countries, is the only international treaty covering trade in grains.

Egypt has been one of the convention members since its establishment in 1995 and has been a member of its governing council.

On 13 February 2023, Egypt notified the Secretary-General of its decision to withdraw from the Convention effective 30 June 2023 in accordance with Article 29 of the Convention.

Any member may withdraw from this Convention at the end of any fiscal year by giving written notice of withdrawal to the depositary at least 90 days prior to the end of that fiscal year.

Egypt's decision comes amid soaring prices in grain markets linked to the ongoing Russian-Ukrainian war.

In a statement to Reuters, the Egyptian Ministry of Foreign Affairs said the decision was made after an assessment by the ministries of supply and trade concluded that Egypt's membership in the council delivered "no added value."

Nader Nour El-Din, the former advisor to the Minister of Supply at The Egyptian General Authority for Supply Commodities (GASC) and expert on international grain and food stock exchange, stressed the importance of "effective" agreements that can have influence over global markets and protect developing countries from rising prices.

Amid the Russian-Ukrainian crisis and soaring food prices, which have negatively impacted the country especially amid a hard currency crunch, Egypt has complained about unjust prices amid the global crises, Nour El-Din told Ahram Online.

Egypt, the world's largest wheat importer and the world's fourth importer of corn, finds no justification for the rise in wheat prices from $250 to $520 per ton, Nour El-Din added.

Egypt has always called for an effective role by the treaty members in this matter, not to exploit crises, to control prices, and to help importing countries, especially developing ones like African nations, he added.

However, these calls have not been heeded, the expert said, adding that even if wheat prices are low, importer countries are not allowed to import large amounts exceeding three shipments.

Egypt hoped that the treaty would have played an effective role or even offered special prices for developing counties amid the latest food crises, including during that of 2011 when wheat prices hit $480 per ton, and that of 2007-2008, which was caused by the speculations of the global stock exchanges for grain.

As long as the markets are based on supply and demand, there is no point in the country's membership in this treaty, Nour El-Din pointed out.

Arnaud Petit, executive director of the International Grains Council, which administers the treaty, told Reuters that several members will ask Egypt to reconsider its decision.

"Several delegations within the IGC are surprised and sad about the decision," he added.

Egypt has been seeking new international sources of wheat since the onset of the Russia-Ukraine war. It is also working to increase its homegrown production.

Before the onset of the European conflict, Egypt used to rely on Russia and Ukraine for 80 percent of its imported wheat.

The country relies heavily on wheat for making bread, a main staple of the Egyptian diet. Egyptians consume almost 100 billion loaves of bread annually, made with around 18 million tons of wheat, according to government officials.

Trade Minister Ali Moselhi told Reuters that Egypt needs to import five million tons of wheat for the fiscal year 2022/23.

Short link: