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While some media reports state that Egypt is in a state of panic, its General Authority for Supply Commodities believes there is no reason to worry about how the country will secure wheat imports following Russia’s invasion in Ukraine. Photo: Supplied/FoodForAfrika.com

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No need for panic, says Egypt amid war-driven wheat crisis

by Lucinda Dordley
7 Mar 2022
in Agri News
Reading Time: 3 mins read
A A
While some media reports state that Egypt is in a state of panic, its General Authority for Supply Commodities believes there is no reason to worry about how the country will secure wheat imports following Russia’s invasion in Ukraine. Photo: Supplied/FoodForAfrika.com

While some media reports state that Egypt is in a state of panic, its General Authority for Supply Commodities believes there is no reason to worry about how the country will secure wheat imports following Russia’s invasion in Ukraine. Photo: Supplied/FoodForAfrika.com

Egypt may find itself in trouble as a result of the Russia-Ukraine war. Wheat is one of the North African country’s staple imports because it is not in a position to grow and harvest enough of the grain to feed itself.

To secure sufficient and cheap supply of bread and vegetable oil for its 105 million citizens, the Cairo government relies on massive amounts of heavily subsidised imports. Egypt has already become the world’s largest importer of wheat and one of the top ten importers of sunflower oil as a result of securing those supplies.

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Following the Arab Spring more than a decade ago, Cairo has faced down food inflation levels. Now, the sky-high cost of food, pushed up by the Russia-Ukraine war, is burning holes in the pocket of the average Egyptian citizen.

Experts say prices are likely to remain high for the duration of the war as Russia is currently the world’s largest wheat exporter. Ukraine is the fifth largest, accounting for a combined total of 30% of global wheat exports.

The country imports approximately 85% of its wheat from Russia and Ukraine, as well as 73% of its sunflower oil. The country has been scrambling to come up with an alternative plan for both these imports as activity at Ukraine’s ports have ground to a halt.

Could the European Union be an option?

The General Authority for Supply Commodities (GASC), which is Egypt’s state buyer, put forward an international tender for wheat imports. Within a 48-hour period, only France accepted the tender and offered 60 000 tonnes of wheat. With the second tender, the GASC said it was simply “testing the waters.”

“We will look into the EU because of proximity but we will not exclude other exporters like the US, Kazakhstan, Romania,” said Ibrahim Ashmawy, Egypt’s deputy supply and internal trade minister to Reuters.

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Ashmawy added the he believes that Egypt does not yet have reason to panic, as its current wheat reserves are estimated to last for at least the next nine months.

GASC has purchased one cargo of Ukrainian wheat for February since the invasion. Three ships with 42 700 tonnes of the 60 000 tonnes booked were allowed to leave port.
 
Two more cargoes totalling 120 000 tonnes that were acquired in December are, however, detained in port.
 
GASC has ordered 300 000 tonnes of Ukrainian and Russian wheat, as well as 120 000 tonnes of Romanian wheat, for delivery in March. An additional 180 000 tonnes of Romanian wheat have been reserved for April.
 
According to one trader, GASC has agreed to extend the shipment deadline for at least one cargo stranded in Ukraine and has stated that it will be lenient with suppliers’ documents.

ALSO READ: Russia’s relationship with Africa

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Lucinda Dordley

Lucinda Dordley

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