Owing to the topography of Egypt, inadequate water resources and limited arable land, it is impossible for Egypt to be self-sufficient when it comes to crops, mainly wheat. Egypt has a national diet that is heavy on bread. And since they can’t produce sufficient amounts of wheat locally, Egypt is one of the biggest importers of wheat in the world. It depends mainly on Black Sea wheat and imports around 12 million tonnes every year.
In 2020, Egypt imported 96.7 percent of wheat from five countries. The Russian Federation and Ukraine are Egypt’s leading wheat partners. They together account for around 85 percent of wheat imported by Egypt with Russia constituting 61 percent of the total wheat imports and Ukraine at around 24 percent.
The Russian Invasion Of Ukraine And Its Impact On Wheat For Egypt
The ongoing onslaught of Russia-Ukraine threatens the inflow of wheat in Egypt, which happens to be one of the most important crops in the country. Although Egyptian authorities made trade deals with Russia for wheat imports, it had to cut short the deal with Ukraine owing to the increase in import duty by the country.
Egypt Looks Forward To India
To supplement its wheat needs, Egypt is looking out for potential exporters of the crop. Supply Minister Aly Moselhy, in May, made an agreement with Indian officials to import 500,000 tonnes of wheat but the deal didn’t materialise. Mr. Moselhy, however, has now confirmed that 180,000 tonnes of wheat will be imported from India at $400 per tonne.
India in mid-May announced that it is going to ban wheat exports due to lower domestic production, with an exception for countries such as Egypt due to concerns of food security. The move, however, led to the cutting short of the former deal of 500,000 tonnes to 180,000 tonnes. “Based on what the supplier said, the condition was that the wheat has to be at the ports, then it would be available,” Moselhy said on Sunday.
Egypt is also looking at ways to extract more flour from its grain, Moselhy said, by raising the extraction percentage for flour used for subsidised bread to 87.5% from 82%. It plans to save around 500,000 tonnes of imported wheat, and to import 5-5.5 million tonnes of wheat for the 2022/23 fiscal year, he added. Current wheat reserves are sufficient for 5.7 months after the procurement of 3.9 million tonnes in the local harvest, Moselhy said on Sunday.
For a country that is largely dependent on imports, any obstructions in the inflow will lead to catastrophic implications. Wheat is one such commodity Egypt is highly dependent on but cannot produce locally. Egypt has been subsidising bread for its 70 million population and plans on doing so in the future. With the Ukraine-Russia crisis, Egypt realised soon enough that it has to diversify its wheat supply partners and India, being one of the largest producers of wheat became one of the viable options. However, India’s recent policy of restricting Bulk Wheat Exports came in the way of an easy agreement but in the end, the deal did materialise at 180,000 tonnes of wheat at $400 per tonne.