January 5, 2011

Egypt may import extra wheat on crop concerns

Despite high prices, Egypt may import more wheat this season, with demand driven by concerns over next summer's domestic crop.

US Department of Agriculture officials in Cairo lifted above 10 million tonnes their forecast for Egypt's purchases of foreign wheat.

Besides a reduction in sowings estimated at 100,000 acres, or roughly 7%, "yields may also be down because of the lack of availability of high quality seeds", the USDA said in a report.

About 25-30% of the crop was sown with seed deemed of high quality, compared with the 50% that Egypt's government aims to.

The government is also planning replace 500,000 tonnes of rice in state food programmes with an equal quantity of macaroni, which is made from wheat.

The officials pegged Egypt's 2010-11 wheat imports at 10.2 million tonnes, putting it 400,000 tonnes above official USDA estimates, and only marginally down on last year's purchases.

The US, which has the richest supplies of any world wheat exporter, was set to provide at least 3.5 million tonnes of this, with the Black Sea exporters sidelined by a drought-damaged harvest.

The persistence of the drought into last autumn has prompted forecasts that Russia will be unable even this year to return to grain production of 90 million tonnes or more.

Meanwhile, winter wheat crops in China and the US have been dogged by dry start.