According to Zawya, the decision follows the recent move by Russia decision to withdraw from the agreement on the Black Sea Grain Initiative concluded under the aegis of the United Nations on July 17.
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.
With such a huge appetite, Egypt is forced to rely on imports as local wheat production, despite being the highest in Africa, is unable to meet the local demand.
However, Egypt’s economy has been negatively affected by an increase in grain prices since Russia invaded Ukraine last year coupled with the recent withdrawal of Russia from the Black Sea Agreement.
Egypt, therefore, is already preparing to adapt to this new reality that has caused panic in the world cereal market.
Egyptian Supply Minister Ali El-Mosilhy revealed that the sought fund from the Abu Dhabi Fund for Development would come via tranches of $100 million, however, he didn’t say when a deal is likely to be finalized.
El-Mosilhy criticized Russia’s exit from the Black Sea grain export initiative and said it will continue to import Ukrainian wheat even after the collapse of the United Nations-backed agreement this week.
“We are not pleased with the Russian withdrawal from the UN grain-export deal,” El-Mosilhy said. He urged Moscow to reconsider its position.
According to Russia, while the grain export giant has agreed to play along with the deal that allowed Ukraine to export 33 million tons of agricultural products across the Black Sea for almost a year, its sales of food and fertilizers have been limited, adding that various obstacles must be removed before it rejoins the Black Sea Grains Agreement.
With the end of the Ukrainian corridor on the Black Sea, observers anticipate an increase in price volatility in the coming weeks.
El-Mosilhy pointed out that since Russia invaded Ukraine last year, Egypt’s economy has been negatively affected by an increase in grain prices.
He added that while global benchmark wheat futures had begun to moderate, they’ve surged this week after Russia terminated the export pact.
Earlier this month, Egypt announced that Abu Dhabi wealth fund ADQ would invest $800 million in companies in its economy. Qatar has also looked to bolster the nation’s economy.
According to El-Mosilhy, the fund would be a boost for the African nation, which is facing a dire shortage of foreign exchange and a cost-of-living crisis, partly as a result of soaring food prices related to the war in Ukraine.
Russia said it would not prolong the grain pact after accusing the West of failing to fulfill a parallel memorandum aimed to facilitate Russia’s agricultural and fertilizer exports.
On its part, the International Monetary Fund has said Russia’s withdrawal from the agreement allowing Ukrainian exports via the Black Sea weakens the global food security outlook and risks increasing food prices, particularly in low-income countries.