EGYPT – Egypt’s General Authority for Supply Commodities (GASC) has sealed a deal to import 360,000 tons of wheat to maintain strategic reserves, according to a statement by the Ministry of Supply and Internal Trade.
According to officials, the batch, which will be sourced from Russia and Romania will help keep Egypt’s wheat reserves sufficient for six months as the country adopts to Russia’s withdrawal from the Black Sea Grain deal.
In a press release, the authority said this purchase falls within the framework of the Supply and Internal Trade Ministry’s strategy to enhance its stocks of staple commodities. The deal includes 60,000 tons of Romanian wheat and 300,000 tons of Russian wheat.
Egypt ranks as the world’s top wheat importer with an annual intake of around 12.5 million tonnes. The North African country imports more than 80% of its demand from Russia and Ukraine.
Unfortunately, Egypt’s economy has been negatively affected by an increase in grain prices since Russia invaded Ukraine.
The country has in the recent past been sourcing wheat from alternative regions as well as encouraging farmers to increase their wheat supply to the government in an effort to boost local supply.
Egyptian Supply Minister Ali El-Mosilhy recently revealed that the country was in talks with the UAE to secure US$500 million funding to support additional wheat imports.
Consequently, the GASC announced that it has arranged an international tender for wheat. Offers are to be submitted on a free-on-board basis with shipment between 1 September and 25 October adding that payments would be made through the International Islamic Trade Finance Corporation (ITFC).
According to a London-based think tank Capital Economics, Egypt’s wheat import bill is to reach US$2.5 billion on an annualized basis.
Although lower than the 2022 bill of US$3.8 billion, the cost will still bring the country’s balance of payments and foreign reserves under more strain.
Capital economics intimates that turmoil in wheat markets is expected to take inflation rates to new levels in a country where bread remains the main daily staple.
However, in June, the GASC announced an international tender for wheat which was scheduled for delivery between 21 and 31 July.
The government, on the other hand, has committed to purchase four million tons of local wheat during the current harvest season, which started in April and runs through the fall.