Egypt diversifies wheat suppliers as large international purchases resume
Cairo halted tenders after the steep rise in prices that followed the outbreak of war in Europe, but since June it has locked in new large quantities that also show which countries are filling the gap left by Ukraine.
As Egypt tries to navigate the impact of the war in Ukraine on global agricultural trade, the state’s grains buyer has abandoned the caution shown during the first months after the outbreak of the conflict and returned to international markets in June in order to make up for the country’s falling wheat stocks and shore up a key part of its food security.
In total, the General Authority for Supply Commodities (GASC), which is responsible for grain procurement for Egypt’s bread subsidy program, has locked in almost 2,500,000 tons of wheat since early June, in part supported by a loan from the World Bank to bolster its food security. The purchases, which will be shipped over the next four months, included the largest single tender in a decade and show the suppliers Cairo is turning to in order to fill the gap left by Ukraine, which accounted for 22% of its wheat imports.
As a result of these latest series of purchases, which also come as Egypt struggles to secure the amount of wheat it had initially planned to obtain through local farmers, the country’s strategic wheat stocks now cover, for the first time, up to seven months, according to a government statement.
“GASC always buys enough for the food security of Egypt, and in fact, they were a little bit behind the pace compared to last year. So it was actually inevitable that they had to buy quite a big volume because they had been a little bit behind the time schedule they like to have coverage for, which is at least a six months’ supply,” said Swithun Still, an advisor to Digital Commodity Exchange (DCX), a market place for trading grains.
