Egypt is importing wheat to bolster its strategic reserves

Egypt is importing wheat to bolster its strategic reserves

On April 7, an Egyptian ship carrying a large amount of wheat left the Romanian port of Constanata, a Romanian port operator said yesterday. According to the operator, the load will soon be followed by the two other ships, loaded with grains. 

Grain market anticipated Egypt’s tender since buyers from around the region seek to expand their reserves on fears that the lockdown measures to halt the spread of Coronavirus could lead to further export restraints and slowdowns in supply chains.

The Egyptian government has formed a committee to receive both local and imported wheat. Its goal is to supervise the delivery dates and to make sure that suppliers will adhere to these dates. USDA is now planning total wheat exports at 1 bln bushels

The country also bought a smaller quantity of 120,000 tonnes of Russian wheat. The minister of supply of Egypt announced that the country would look to import 800,000 tons of the grain. Traders had been expecting a much more significant purchase.

GASC, the General Authority for Supply Commodities, said its purchase consisted of 60,000 tonnes for shipment May 15 – May 25 and 60,000 tonnes for delivery May 26 -June 5. The prices were the cheapest on the market. Still, they were high enough to restrain a significant purchase. 

Traders said it is difficult for Egypt to buy significant amounts of wheat. The difference in prices of first and second shipment periods is enormous.

 

 Egypt is expected to harvest 3.6 million tons of wheat this year

Wheat is one of the most strategic commodities in Egypt. Production rates this year are likely to be higher than last year. The cultivated area of ​​wheat reached 3.4 million acres in comparison to 3.1 million acres last year. This year, the grain crop is likely to amount to 3.6 million tons. 

Ali Al Muselhi, the Egyptian Minister of Supply and Internal Trade, focused on facilitating all procedures of collecting local wheat from farmers and local suppliers.

Marketers provide storage places and marketing sites that meet the conditions and standards approved by the Ministry in all governorates, cities, and villages of the country. The Ministry has approximately 450 collection spots for wheat. The storage capacity of wheat reaches nearly 3.2 million tons, according to the Ministry.

 

Increased population causes an increase in the grain consumption

Despite an increase in domestic wheat output, the import of the grain continues as consumption increases.  

The country is the biggest wheat importer in the world. The grain imports for 2018/19 year are estimated at 12.5 million tonnes. It is about 15 % above the average of the last five years.

Previous Month, USDA reported that Egypt’s wheat production for the marketing year 2020-21 is anticipated to surge by 1.5 % to 8.9 million tonnes. USDA attributes the rise in consumption to an increased population. The US Department of Agriculture forecasted the imports for the 2020-21 market year to amount at 12.85 million tonnes, a slight increase of 0.4 % compared with the previous year.

 

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