Egypt Eyes Fuel, Wheat Hedging as Global Trade War Weighs on Economy
Egypt plans to hedge wheat, fuel, and edible oil prices in its next fiscal year starting July 1, aiming to buffer against global economic turmoil and U.S. tariffs. PM Mostafa Madbouly highlighted recent foreign investor outflows and currency volatility. The move comes amid efforts to revive the economy post-IMF bailout and boost private sector participation.
Egypt plans to hedge against volatility in the prices of commodities such as wheat and fuel, part of efforts to tackle the impact of US tariffs that are roiling the global economy, Prime Minister Mostafa Madbouly said.
Authorities will hedge for those items, as well as edible oils, in the fiscal year that begins July 1, Madbouly told reporters Wednesday in a weekly briefing. He didn’t give further details.
While the Middle East’s most populous nation is facing the lowest baseline tariff of 10% imposed by US President Donald Trump, the country that’s been a favorite for investors in emerging-market debt hasn’t escaped the turmoil gripping the world.
Egypt saw the exit of some foreign money earlier this week, Madbouly said. He didn’t give figures and said outflows have now tapered off.
The selloff led Egypt’s pound on Monday to post its biggest single-day decline against the US dollar since a March 2024 devaluation that sought to end a crippling foreign-exchange crunch.
There is now a “world war, by all standards” that’s being fought through trade and economic means, Madbouly said, describing a “new era entirely.” A system of alliances has been supplanted by a situation where nations may solely look out for their own interests, he said.
The global turmoil comes as Egypt tries to reboot its economy after a vast United Arab Emirates and International Monetary Fund-led bailout and is grappling with a sharp drop in Suez Canal revenue stemming from attacks on Red Sea shipping by Houthi militants in Yemen.
Shrinking the Egyptian state’s role in the economy is a key pillar of the IMF deal. The government on Wednesday said it was tapping advisers including EFG Hermes, CI Capital, Boston Consulting Group and PricewaterhouseCoopers on the process of offering four military-affiliated companies to private investors via the country’s sovereign wealth fund in 2025 and 2026.
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Source : Bloomberg
