The prospect of an invasion of Ukraine by Russia does not only send cold sweats to investors on the world’s major stock exchanges. In the wheat industry, developments are also being closely monitored.
In Egypt, the government fears disruptions on the world wheat market with the current tensions between Russia and Ukraine, the two main exporters of the cereal.
If the country of the pharaohs will be in the front line in the event of a disruption of the world grain trade because of its status as the largest importer, it is all the more vulnerable since these countries bordering the Black Sea represent its flagship suppliers. .
Indeed, according to data from the United States Department of Agriculture (USDA), Russia and Ukraine shipped to Egypt 8.13 million tonnes and 2.45 million tonnes of wheat respectively during the marketing year. 2020/2021. This cumulative volume represents 88% of the total stock of wheat imported by the North African country (12.14 million tonnes).
Faced with this situation, Ali Moselhy, Minister of Supply explains that the executive is currently working on a strategy to diversify its import sources. “We are also fine-tuning a hedging mechanism to protect against rising world wheat prices. A committee has been formed at the level of the Ministry of Finance to study such a policy and discussions will be finalized at the beginning of next month to find out whether we are going to adopt it or not”, adds Mr. Moselhy.
For the time being, the authorities indicate that there are no concerns about the country’s food situation. And for good reason, wheat stocks are comfortable and will be able to supply the domestic market for 5.4 months.
In the country, wheat consumption is expected at 21 million tons in 2021/2022.