Egypt’s wheat production to drop to its lowest level in 20 years

EGYPT – Egypt’s wheat ending stocks in marketing year 2023-24 are forecast to drop to their lowest level in 20 years as the country grapples with a smaller crop.

This is according to a Global Agricultural Information Network report from the Foreign Agricultural Service of the US Department of Agriculture (USDA).

The USDA attributes the dip to increased demand and a shift in trade flows due to Russia’s ongoing conflict with Ukraine.

In addition, the year-on-year decline in wheat production is due to the area harvested decreasing to 1.35 million hectares compared to 1.45 million in 2022-23, the FAS said.

“The decrease in area is driven by increased area of Egyptian clover and sugar beets,” the FAS said.

The FAS noted that to increase local wheat production and sell its wheat to government purveyors, the Egyptian government last April increased the procurement price of wheat by almost 70% over the previous marketing year.

Recently, the Egyptian Cabinet increased the reference local wheat procurement price from EGP 1,500 to EGP 1,600 per ardeb (150 kg) for the new harvest season in a bid to incentivize farmers to sell their produce to the state.

The FAS said that consumption is expected to rise in 2023-24 by 50,000 tonnes to 20.6 million, which would be the second-highest total on record.

Egypt’s population currently stands at approximately 105 million, according to the Central Agency for Public Mobilization, but that does not include an estimated 9 million migrants from Iraq, Libya, Syria, Yemen, Sudan and other countries.

Egypt’s population (excluding migrants) is expected to reach 124 million by 2030, putting more pressure on the wheat supply.

Egyptian wheat imports are projected to increase by 7% to 12 million tonnes in the 2023-24 marketing year, the report said. Egypt, the world’s largest wheat importer, has been adversely affected by Russia’s invasion of Ukraine as high wheat prices have increased and caused it to seek more Russian wheat.

The largest exporters of wheat to Egypt in 2022-23 were Russia (8.1 million tonnes) and the European Union (1.8 million tonnes), according to the FAS. Egypt in 2023-24 is estimated to receive far less wheat from Ukraine (856,377 tonnes) than usual due to the war.