Posted on January, 10, 2023 at 10:12 am
Egypt is planning on importing around 4 million tonnes of wheat in 2023 for bread production, which is subsidized by the government in Cairo, Egyptian Supply and Internal Trade Minister Ali Moselhi told Russian news agency Sputnik on Monday
"The annual consumption of wheat [for state-subsidized bread production] in Egypt is estimated at 9 million tonnes. This year we plan to receive 5 million tonnes of local wheat and import 4 million tonnes," Moselhi said.
The head of the farmers' syndicate in Egypt, Hussein Abu Saddam, told AFP back in October that he has already observed an exodus from the countryside brought on by the changing climate.
Agriculture in Egypt -- "one of the aridest countries in the world" -- has grown even less profitable because of new climate-linked hazards such as "the appearance of new parasites," he said. "Young people from rural areas are migrating abroad or to big cities to work in industry."
Egypt is highly dependent on imports when it comes to the key raw material used to make bread in a country whose population perceives the good as an essential staple to a meal.
El Salvador, Ghana, Egypt, Tunisia, and Pakistan - all emerging economies - will be challenged with a historic cascade of defaults amounting to a quarter of a trillion dollars of debt, which will continue to exert pressure on economies, Bloomberg reported months back.
In early 2022, it was reported that the Egyptian wheat market was struggling in the face of the Ukraine crisis, with the prices of wheat in the world's biggest importer rising after it tried to boost local production before realizing that its supplies could not meet public demand.
The repercussions of the crisis have extended to West Asia and North Africa, with the region importing much of its wheat from Ukraine and Russia. Egypt has started to feel the impact of the crisis, but it is not the first one, since Lebanon was the first to feel the heat of the issue, with Moscow and Kiev making up 65% of the country's wheat supplies.
Additionally, Egypt suffered from wheat shortages as the wheat was docked right on its seaports. Almost a million tonnes of wheat was blocked in October in Egyptian seaports due to the shortage of US dollars in the country.
"Some 800,000-900,000 tonnes of wheat has accumulated in Egyptian ports over the past three weeks. We expect this cargo to be released, which is impossible for now because of a dollar shortage," said Walid Diab a member of the Chamber of Cereals Industry.
Cairo has been increasing its spending on imports as well as international commitments especially during the COVID-19 pandemic, after racking up $45 billion in net foreign reserves in 2020, with dollar reserves shrinking by $33.1 billion during the summer.
The shortage in USD in Egypt has ramped up the prices of bread, which is unsubsidized, in addition to other baked goods, increasing the prices of corn and soy. This created a domino effect in animal feed, meat, and poultry markets, according to Diab.
The cereals chamber has notified the ministries of finance and supply about the wheat imports hold-up. However, Diab blames the Central Bank of Egypt, which is solely in charge of managing the dollar resources in the country.
About 42% of Egypt's grains are imported from Russia or Ukraine, and 31% of all tourists in the country are Russians and Ukrainians, according to the minister. However, Cairo has been seeking alternative suppliers of grain while attempting to attract visitors from different countries.
Ukraine and Russia, which share the Black Sea, are the world's breadbasket: they provide collectively 28% of global wheat exports. Russia and Belarus, in parallel, provide 40% of potash, an important fertilizer. Countries dependent on imports, particularly poor countries, are the first victims of this downfall as grain and corn prices are on an increase.
Source: Almayadeen