EGYPT – The Egyptian Cabinet has approved new incentives for Egypt’s farmers to increase the available wheat in a bid to support local production and subsequently reduce the import bill of wheat, Zawya has reported.
According to the released statement, the incentives will bring the price of wheat to EGP 1,500 (US$ 48.54) per ardeb (1 ardeb= 150kg), up from EGP 880 (US$16.4)
Zawya reports that the decision comes in the implementation of the directives of President Abdel Fattah El-Sisi to revise the supply price of wheat for farmers in the current harvest season as stated by Nader Saad, the official spokesperson for the Cabinet.
Egypt has one of the highest per capita consumption of wheat in the world. At 180kg, the country’s per capita is almost thrice the global average.
Recently, Reda Mohamed, the Director of the Field Crops Research Institute and Head of the National Campaign to Preserve Wheat revealed that the country is strategizing to raise production to meet 65-70% of local needs from the current 55% by 2030
According to Reda, the forecast was possible since President Fattah had committed to expanding the cultivation of strategic crops, especially wheat.
He further unveiled that the country has already scored success in increasing the land cultivated with wheat to 3,650,000 feddans in 2023, with an annual increase of 250,000 feddans.
In January, Mostafa Madbouly, Egypt’s Prime Minister, revealed that the country continues to bear the pressing cost of wheat subsidies which is estimated to reach EGP 95 billion (US$1.8B) by the end of the year, up from EGP 38 billion (US$708M).
China to overtake Egypt as the world’s largest wheat importer
Meanwhile, the United States Department of Agriculture (USDA) in its recent report has indicated that China would be the world’s largest wheat importer in the marketing year 2022/23, with an estimated 12 million tonnes.
According to USDA, the forecast, which is the highest level since 1995/1996 surpasses the historic largest wheat importer Egypt, which is expected to import 11 million tonnes.
USDA noted that the 2022/2023 volumes of Egypt’s wheat import would be the second lowest stock over the last decade after the 10.15 million tonnes acquired in 2013/2014.
According to the USDA, poor economic health and challenges in accessing foreign currency are behind the slowdown in imports into Egypt.
However, the Egyptian government is also in a move to halt imports by promoting local production through various strategies.
Recently, the European Union (EU) signed a grant agreement of €40 million (US$43.5M) in partnership with the Italian Agency for Development Cooperation (AICS) to support the production of wheat in Egypt as the country strives to attain self-sufficiency.
As for China, which is also the world’s leading producer of wheat, Ecofin Agency reports that the strength of purchases is linked to the low international prices of the cereal which, under the effect of an abundant supply in Australia, the EU, and Canada fell below $400 per ton, a better price than domestic prices.