Egypt signs wheat deal with Russia
CAIRO, EGYPT — Egypt, the world’s leading wheat importer, recently purchased nearly 500,000 tonnes of wheat from Russia, according to Reuters, which cited unnamed traders.
Egypt’s General Authority for Supply Commodities (GASC) bought the Russian wheat on Sept. 1 from the trading firm Solaris in a private deal at relatively low prices, Reuters reported. It will reportedly pay $270 per tonne for the wheat.
Since the Russian invasion of Ukraine last year disrupted global wheat markets, a shift toward direct purchases, instead of tenders, has helped Egypt negotiate better prices, according to Reuters.
The war between Russia and Ukraine, traditionally two of Egypt’s largest wheat suppliers, has caused price volatility and shifted global trade patterns. Prior to the war, Egypt received 60% of its imports from Russia and 22% from Ukraine, according to a recent report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture.
Egypt’s wheat imports from Ukraine in 2022 fell by 73%, the FAS said.
In the same report, the FAS forecast Egypt’s wheat imports for the current marketing year (2023-24) to reach 10.8 million tonnes, about 3% higher than the previous year’s 10.15 million tonnes, which was the second lowest total in the past 10 years. The FAS said the decline in imports was attributed to the economic fallout of the war in Ukraine, which generated an ongoing foreign currency challenge, causing disruptions for Egypt’s wheat trade.
The war has forced Egypt to expand its number of wheat suppliers. Earlier this year, the GASC bought 500,000 tonnes of wheat from India, and last month the Egyptian government signed a $500 million deal with a private company, Al Dhara, from the United Arab Emirates, as well as the Abu Dhabi Exports Office, for a five-year supply of wheat.
Because its domestic wheat production is limited and with one of the world’s highest per capita wheat consumption rates, Egypt has no choice but to rely heavily on imports. Providing wheat-based food products at affordable prices has been a top priority of the government over the years, as shortages or high prices often have led to social unrest.
Source Link: https://www.world-grain.com/articles/18996-egypt-signs-wheat-deal-with-russia
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