Egypt's wheat imports rebound after dip in global prices

Egypt's wheat imports rose by more than a million metric tons in 2023, data seen by Reuters shows, with traders citing a dip in global prices from highs reached after Russia invaded Ukraine.

One of the world's top wheat importers, Egypt uses the grain it buys for heavily subsidised bread available to more than two thirds of the North African nation's 105 million population.

Egypt imported about 10.88 million tons of wheat in 2023, up 14.7% from 9.48 million tons in 2022, the data showed. That was mainly because shipments delivered to state buyer, the General Authority for Supply Commodities (GASC), jumped by 26% to about 5.6 million tons.

Imports by the private sector rose 1.3% to 5.12 million tons.

"Imports in 2022 were extraordinarily low because of high prices and the FX crunch following the war in Ukraine, when importers weren't able to buy as much," said Hesham Soliman, president of Egyptian merchant Mediterranean Star.

The growing population and rising demand could have led to a bigger increase in wheat imports but for Egypt's chronic shortage of foreign currency, he said.

Egypt's total wheat imports fell 18.7% to about 9.5 million tons in 2022, estimated to be the lowest since 2013, as the war in Ukraine disrupted GASC's wheat purchases, caused a spike in global prices and exacerbated a foreign exchange crisis in Egypt that left private importers unable to pay for wheat stuck at ports.

Most of Egypt's 2023 imports came from Russia, with shipments rising 39.5% to 7.56 million tons, accounting for 69.5% of total wheat imports.

Wheat imports from Ukraine have edged up to 1.28 million tons after dipping to 845,587 tons in 2022, with last year's shipments accounting for 11.8% of imports.

Soliman added that imports rose partly because GASC was buying more wheat to sell to the private sector through a new commodities exchange.

As the Ukraine grain deal collapses, what's next for the Middle East? https://t.co/b6ND4fQjJ7

— The New Arab (@The_NewArab) July 30, 2023

Trading on the Egyptian Mercantile Exchange(EMX) began in November 2022 in an effort to tackle private sector price distortions after a spike in the price of unsubsidised bread.

GASC, which is mainly responsible for importing for subsidised bread, can help private sector mills by selling them wheat from its own reserves.

The authority has sold 1.2 million tons since the launch of the exchange, about 1.1 million tons of it in 2023, EMX chairman Ibrahim Ashmawi told Reuters late on Tuesday.

"GASC increases its purchases to secure the country's needs," said Ashmawi. "Part of boosting reserves is manoeuvring when there's a shortage in markets, so it sells on the exchange."

Ashmawi added that he does not expect GASC to increase purchases specifically for the commodities exchange but it would do so if needed.

The data seen by Reuters shows total deliveries, not purchases, of wheat shipments to Egyptian ports in the previous calendar year and are not official figures.

However, Ashmawi this month told domestic media that total 2023 imports were about 11 million tons.