Data provided to Reuters showed that Egypt relied more on Russian wheat imports last year, despite a sharp decline in wheat imports and measures to diversify sources of purchases.
While Egypt’s wheat imports from Russia fell by 6.7% in 2022, Russia’s share, including purchases by the Egyptian government’s General Directorate of Supply of Goods and the private sector, rose to 57% from 50% in 2021.
This partially offset a decline in shipments from Ukraine, which accounted for 8.9% of Egypt’s wheat imports, down from 28% in 2021.
The war in Ukraine has disrupted wheat purchases for Egypt, one of the world’s largest wheat buyers, and the government is in talks with countries including India in an attempt to diversify supplies from the Black Sea.
The economic fallout from the war also triggered a currency crisis in Egypt, resulting in a slowdown in imports in general and a buildup of goods in ports, on top of a $3 billion bailout package from the International Monetary Fund.
Egypt maintains close political ties with Russia, but officials and traders say the preference for Russian wheat is due to its price, which is paid in dollars.
Ali Moseli, Egypt’s supply minister, told Reuters last week that it was, of course, a matter of prices. We offer and respond FOB plus freight and we see the lowest price of the two buys.”
Traders say there have been some payment difficulties due to the sanctions imposed on Russia as banks require more paperwork, but Russian wheat remains the most competitive at the moment, with state catering authorities buying more than 2m tonnes in the past few months.
“Russian wheat dominates, despite all the problems associated with the high cost of ship insurance and the winter climate in the Black Sea,” said a European trader.
Mohamed El-Gammal, grain adviser for the Food and Agriculture Organization of the United Nations (FAO) based in Cairo, said Egypt’s total wheat imports fell 18.7% to around 9.5 million tons in 2022 at the height of a high prices and a currency crisis that made private factories and importers insolvent. Wheat prices stuck in ports. He added that imports had reached their lowest level since 2013.
Apart from Russia, shipments from Romania decreased by 35% to 1.3 million tons, and from Ukraine by 74% to about 845,587 tons.
The private sector has been able to diversify some of its purchases with rare cargo entering ports from the US, India and Brazil.
Shipments from France also quadrupled to 1.26 million tonnes.
