The country of the pharaohs in fact ordered on August 25, a shipment of 530,000 tonnes of the cereal, a record level which confirms the Russian stranglehold on its domestic supply.
In Egypt, the appetite for Russian wheat is not waning. Indeed, the Supply Authority (GASC) ordered a shipment of 530,000 tonnes of Russian wheat, a record volume since 2012/2013 according to data collected by Bloomberg.
This significant level of Russian wheat purchases crowns the country’s unchallenged dominance in tenders since the start of August. According to observers, this situation can be explained in particular by the underperformance of some cereal producers.
Indeed, Russia is relatively sheltered from competition in a context where the wheat harvest is expected to drop to its second lowest level for 15 years in France and also looks less good on the side of other suppliers of the Black sea like Ukraine and Romania.
Added to this is the weakness of the ruble against the dollar which makes Russian cereals more competitive compared to EU exports penalized by an appreciation of the euro.
If Russia already controls nearly 80% of Egypt’s supplies compared to 50% at the same time last year, this trend could continue.
And for good reason. Russia is currently moving towards production close to its 2017 record (85 million tonnes) which should allow it to place more volume than any other nation in the world market and thus strengthen its presence in its main strongholds.
As a reminder, Egypt is expected to import 13 million tonnes of wheat in 2020/2021 according to forecasts by the United States Department of Agriculture (USDA).
Source Ecofin Agency