January 13, 2023

 

Egypt leaned more heavily on Russian wheat as imports declined in 2022

Egypt leaned more heavily on wheat from Russia in 2022, even as the country reduced imports of the grain and looked to diversity its sources of wheat purchases, Zawya reported.

 

Despite a 6.7% decrease in Egypt's imports of wheat from Russia in 2022, Russia's share, which includes purchases by Egypt's private sector and the state grains authority, increased to 57% from 50% in 2021.

 

This partially offset a decline in Ukrainian shipments, which accounted for 8.9% of Egypt's wheat imports, down from 28% in 2021, and fell from 28% to 8.9%.

 

Egypt, one of the top buyers of wheat, was unable to complete its orders due to the conflict in Ukraine, so the government held negotiations with nations like India in an effort to diversify away from Black Sea supplies.

 

The war's economic effects also caused Egypt to experience a foreign currency crisis, which resulted in a slowdown in overall imports, a backlog of cargo in ports, and an IMF financial assistance package worth US$3 billion.

 

Russia and Egypt still have close political ties, but officials and traders said that Egypt's preference for Russian wheat is primarily due to price, which is paid in dollars.

 

Ali Moselhy, Egypt's Supply Minister, said cost is the issue, as no matter the origin, Egypt tenders, check the free-on-board and freight costs, then makes the purchase.

 

Russian wheat is currently the most competitive, with the state buyer purchasing more than two million tonnes in recent months, even with traders reporting some payment difficulties caused by sanctions against Russia as banks request more documents.

 

One European trader said Russian wheat is dominating in spite of all the issues with more expensive ship insurance and the Black Sea winter weather."

 

Mohammed El Gammal, a grains consultant for the UN Food and Agriculture Organisation based in Cairo, said Egypt's total wheat imports decreased 18.7% to roughly 9.5 million tonnes in 2022 despite rising prices and the foreign exchange crisis that left private mills and importers unable to pay for wheat stuck at ports. Imports were also at their lowest level since 2013, he said.

 

Along with Russia, shipments from Romania decreased by 35% to 1.3 million tonnes, and from Ukraine by 74% to 845,587 tonnes.

 

With sporadic shipments arriving at ports from countries like Brazil, India, and the United States, the private sector was able to diversify some of its purchases. Shipments from France increased as well, quadrupling to 1.26 million tonnes.

 

-      Zawya