Exclusive | Egypt in Talks over New Wheat Import Channels; Current Reserves Reassuring: Moselhy
Updated 5/28/2024 10:19:00 AM
Arab Finance: The Egyptian government is currently in talks with several countries, eying new wheat channels, Minister of Supply and Internal Trade Ali Moselhy revealed.
In an exclusive statement to Arab Finance, Moselhy said that Egypt is carrying out a policy to diversify its wheat sources as a strategic commodity.
This move aims to secure the local demand for wheat and mitigate risks associated with dependency on specific sources, the minister noted.
Strategic Wheat Reserves Reassuring
Moselhy affirmed the current reassuring status of the strategic wheat reserve, sufficient for over five months. This is excluded of the local wheat harvest, which is only calculated in reserves at the end of the season.
Additionally, Egypt is planning to ensure that strategic wheat reserve remains sufficient for at least six months over the coming period, he stated.
The minister also told Arab Finance that Egypt is actively engaging in procurement contracts to hedge against anticipated price hikes.
On May 8th, Egypt secured a contract for 420,000 tons of imported wheat, bolstering strategic reserves amidst global weather fluctuations impacting wheat productivity and price trends.
Egypt's strategy includes diversifying import sources from over 20 approved countries worldwide, notably Russia, Ukraine, France, and Germany, to minimize dependency risks, he highlighted.
Regarding other strategic commodities like cooking oil and sugar, Moselhi assured adequate strategic reserves, surpassing 6.8 months for oils and exceeding 14 months for sugar.
Wheat Import Value
Egypt's wheat import value declined by 5% year on year (YoY) in January and February 2024 to $614.96 million, compared to $647.56 million, as per data from the Central Mobilization Agency (CAPMAS).
In February alone, wheat imports surged by 56.8% YoY, reaching $338 million compared to $215.5 million.
In 2023, the country’s wheat imports decreased by 11.7% or $497.56 million, recording $3.77 billion compared to $4.27 billion in 2022.
Egypt is one of the largest wheat importers in the world, with imports amounting to about 10.88 million tons in 2023, up by 14.7% from 9.48 million tons in 2022, 69.5% of which came from Russia.
Global wheat imports have been disrupted over the past two years, with the outbreak of the Russian-Ukrainian war. This significantly impacted the Egyptian markets, particularly wheat consumption and production rates.
Exploring new markets
After the war in Russia and Ukraine, Egypt has added new markets for importing wheat, including India. This brought the total number of countries supplying wheat to Egypt to 22, including 11 major ones. This expansion bridges the gap between Egypt’s wheat production and consumption.
In terms of wheat consumption rates, the government is seeking to increase its wheat strategic reserves, especially with the geopolitical tensions in the Middle East region amid the war in Gaza.
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