EGYPT-Egypt, the world’s largest importer of wheat, is planning to import 4 million tonnes of wheat to meet its annual production of subsidized bread.
The bread subsidy program costs the Egyptian government nearly US$3 billion each year or approximately 60% of total expenditure on food subsidies.
This is not surprising as Bread is a major staple for the country with a population of more than 60 million population and an annual wheat consumption of 9 Million tonnes.
Egyptian authorities, therefore, have to mobilize financial resources each year to subsidise the product so that it is easily accessible even to the most vulnerable sections of the population.
The announcement for the plan to import wheat was made by Ali Moselhy, Minister of Supply and Foreign Trade, on Monday, January 9.
According to the press statement from Ali Moselhy, Minister of Supply and Foreign Trade, the 4 million tonnes are intended to supplement the local wheat production which is estimated at 5 million tonnes.
Mr. Ali said: “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 further added that the problem is being compounded by a trend where young people from rural areas are migrating to big cities to work increasing the consumption need for bread
Although Egypt is one of the largest producers of Wheat in Africa, local production continues to fall short of demand due to several factors
The 4M tonnes from import will therefore bridge a 44% deficit of the total stock required by 30,000 public bakeries that produce the subsidized bread.
The move is taken early in the year to cushion insufficiencies as was seen in 2022 when the wheat market was struggling in the face of the Ukraine crisis.
Moreover, the government is taking precautions after it tried to boost local production before realizing that its supplies could not meet public demand.
Even though the authorities have not yet specified whether the imports will be mainly made via calls for tenders or direct negotiations, several observers underline direct negotiations which bets for better prices could be favored this year.