Egypt is carefully following up the continued tensions alongside the border between Russia and Ukraine, amid issues over the availability of wheat to the Egyptian market.
Moscow has been amassing thousands of troops close to the border with the previous Soviet republic, triggering fears of a potential Russian invasion. Russia opposes Ukraine’s accession to NATO and desires safety ensures from the West that Kyiv is not going to be a part of the alliance, a request rejected by the US.
The Ukrainian disaster was a most important subject of dialogue between Egyptian International Minister Sameh Shoukry and his US counterpart Antony Blinken throughout a telephone name Jan. 27.
The Egyptian Foreign Ministry mentioned talks between the 2 chief diplomats dwelt on varied elements of bilateral relations between Egypt and the US, together with exchanging views and coordination about numerous regional points.
A statement by the US Division of State mentioned Blinken and Shoukry exchanged views on current developments relating to Ukraine, and problems with regional and bilateral concern.
Russia and Ukraine are main gamers of the worldwide grains market, with their wheat exports accounting for 23% of world commerce in 2021-22, in keeping with the US Division of Agriculture.
Consultants warn that the Ukrainian disaster will drive up international wheat costs, which is able to add extra monetary burdens on Egypt, the world’s largest wheat importer.
In 2020, Egypt imported about 12.9 million tons of wheat at a value of $3.2 billion, in keeping with the state statistics company CAPMAS.
“Till now, there isn’t any impression on wheat imports from Ukraine and Russia to Egypt,” Hussein Abo Saddam, head of the Egyptian Farmers Union, informed Al-Monitor over the telephone. “But when the disaster continues to escalate it’s going to negatively have an effect on Egypt, particularly as each Russia and Ukraine are the nation’s largest wheat suppliers.”
Wheat exports from each Russia and Ukraine cowl virtually 85% of Egypt’s wheat demand. In 2020, Egypt was the largest consumer of Ukrainian wheat, importing greater than 3 million tons, virtually 14% of Ukraine’s complete wheat manufacturing. Egypt additionally purchased 8.9 million tons of wheat from Russia in 2020.
Egypt’s wheat consumption for 2021-22 is forecast to succeed in 21.3 million tons, up by virtually 2.4% from 2020-21, in keeping with the US International Agricultural Service.
Abo Saddam mentioned that Egypt is not going to really feel the warmth of the Ukrainian disaster within the close to future because the nation prepares to reap its wheat manufacturing this April.
“The native harvest offers Egypt with round 9 million tons of wheat, which accounts for nearly half of the nation’s wheat wants,” he famous.
The Russian-Ukrainian stress has already despatched up international wheat costs, going up by 7% on the Chicago Mercantile Alternate over the past two weeks. In Europe, wheat futures rose virtually 6%.
“The Egyptian authorities was compelled to extend the value of wheat for native farmers by 95 Egyptian kilos [$6] per bushel as a result of rising international wheat costs,” Abo Saddam mentioned.
On Jan. 25, Egyptian Finance Minister Mohamed Maait mentioned the nation’s public treasury incurred about 12 billion kilos ($762.3 million) in additional allocations to buy wheat as a result of spike in international wheat costs.
However Ahmed Sheha, former head of the Importers Part on the Cairo Chamber of Commerce, downplayed worries about wheat provide to Egypt.
Sheha informed Al-Monitor over the telephone that Egypt’s inventory of wheat and different strategic commodities is enough for as much as six months, which is able to assist comprise any impression from the Russian-Ukrainian disaster on Egypt’s wheat provide.
“I don’t assume there will probably be any impact on Egypt’s wheat imports from each Ukraine and Russia at current. Imports from Ukraine are nonetheless flowing into Egypt as standard and every day with none disruptions,” he mentioned.
Final week, the Ministry of Provide and Inner Commerce eased issues about any disruption of wheat provides to Egypt, saying the nation’s wheat stock is sufficient for greater than 5.2 months.
The ministry mentioned it’s doing every part potential to safe Egypt’s wheat wants both by native farmers or by imports by way of worldwide tenders.
Egypt presently has greater than 410 public, public/personal and personal sector mills. Public mills and public/personal mills produce 82% extraction flour, which is used for making the sponsored bread.
Sheha mentioned Egypt nonetheless can flip to India and Brazil and different wheat-producing international locations to purchase wheat in case the state of affairs escalates right into a navy battle between Russia and Ukraine.
Final month, the Basic Authority for Provide Commodities (GASC), Egypt’s most important wheat shopping for company, mentioned it seeks to purchase 55,000-60,000 tons of milling wheat for cargo in February and March.
GASC Vice Chairman Ahmed Youssef mentioned that the company was working to purchase cargoes of milling wheat from Argentina, Australia, Bulgaria, France, Germany, Hungary, Kazakhstan, Latvia, Paraguay, Poland, Romania, Russia, Serbia and Ukraine.
