EGYPT – Egypt’s General Authority for Supply Commodities (GASC) has secured a historic contract for 3.12 million tonnes of wheat, which will be delivered at a rate of 510,000 tonnes per month from the Black Sea region between November and April.
As the world’s largest wheat importer, the purchase marks GASC’s largest direct purchase since it began this practice in 2022.
According to the Food and Agriculture Organization (FAO), Egypt’s wheat imports are projected to rise by 1.6% to 12.2 million tonnes in the upcoming season.
This follows a significant increase in spending on wheat, which surged by 30% to approximately US$2.3 billion in the first half of 20245. The majority of this wheat is consumed under a government subsidy program, costing nearly US$3 billion annually.
To cut spending costs on the bread subsidy program, the government has signalled its intention to eventually phase it out as part of broader fiscal reforms. However, in the meantime, it has sought innovative ways to reduce costs, such as altering the composition of bread.
Recently, the country rolled out an ambitious initiative to cut wheat imports and reduce spending on subsidized bread by incorporating corn or sorghum as ingredients.
This initiative could save the government millions of dollars annually, but it faces pushback from bakers and millers concerned about potential financial losses and a drop in bread quality.
Under a plan introduced by Egypt’s supply ministry in September 2024, corn flour will be blended with wheat flour at a ratio of 1:4, beginning in April 2025.
This move is projected to save around one million metric tons of wheat annually. While corn flour is less expensive than wheat, local sourcing will be critical for cost-effectiveness.
Despite increasing imports, Egypt aims to enhance its domestic wheat production, targeting a rise to 9.2 million tonnes for the 2024/2025 period, up from 8.87 million tonnes previously.
However, the government has also lowered its self-sufficiency target to 51% by mid-2025, reflecting ongoing challenges in achieving sufficient local production2.
The surge in imports is occurring against a backdrop of economic challenges, including a hard currency shortage that has recently eased due to international investments and loans. Egypt secured an expanded US$8 billion loan agreement with the International Monetary Fund earlier this year.
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