x Abu Dhabi, UAESaturday 22 July 2017

Big bill for Egypt over need to buy wheat

Egypt will need to import up to US$1.8 billion in wheat to help ward off a potential shortage of subsidised bread, US government officials have estimated.

Scrambling for subsidised bread at a bakery in Alexandria. Egypt resumed buying wheat from abroad this month. Asmaa Waguih / Reuters
Scrambling for subsidised bread at a bakery in Alexandria. Egypt resumed buying wheat from abroad this month. Asmaa Waguih / Reuters

Egypt will need to spend up to US$1.8 billion on wheat imports to help to ward off a potential shortage of subsidised bread, US government officials estimated.

The country resumed buying wheat from abroad this month for the first time since February after import levels fell to record lows.

"We estimate that there are sufficient domestic stocks to last about three to four months at present consumption rates," wrote Mohamed Hamza and Mariano Beillard, of the US department of agriculture's foreign agricultural service, in a report released yesterday. "Domestic stocks will last until the end of October, after which Egypt will have to rely on imports."

The world's largest wheat importer would probably need $1.5bn to $1.8bn to import 5.5 million tonnes for its subsidised "baladi bread programme", according to the report. The programme requires 9 million tonnes of wheat.

Egypt's struggle to secure bread is one of the pressing tasks facing a country reeling from its second uprising in a little more than two years. Falling currency reserves, which reached $14.9bn last month, have been fuelling concerns about the government's ability to supply cheap bread to its 83 million citizens.

Reports had suggested producers were warning that stocks of imported wheat were hitting levels that threatened to reduce the availability of flour needed make bread of a reasonable quality.

"Due to the deteriorating socio-political and economic situation, local farmers are opting to hold back a greater percentage of their harvest for feed, seed and personal consumption purposes," the US government wrote. "Farmers, like most other Egyptians are increasingly leery of higher prices for food and goods in the coming months."

Egypt's depreciating pound has pushed up prices of food and other goods, with inflation reaching 8 per cent in May.

Russia's Grain Union said last week it was likely to raise imports of wheat to Egypt in the marketing year that started on July 1. Russia is one of the largest suppliers of the grain to Egypt.

The report said Egypt lacked sufficient silo storage space, potentially hindering stockpiles of imported wheat.

 

tarnold@thenational.ae