Egypt takes urgent measures to secure wheat after Ukraine war sparks crisis

CAIRO -- Egypt is taking urgent measures to secure a strategic stockpile of wheat to get it through the crisis triggered by Russia's war on Ukraine and ensure the essential grain will continue to be available on the market.

According to a new report on the repercussions of the war published by the Cairo-based Forum for Development and Human Rights, Egypt is feeling the impact of the war through grain imports and a rise in energy prices.

Together these factors impact food security, Ahram Online reported Sunday (April 3), noting that Egypt is the largest importer of wheat in the world.

Russia and Ukraine are major wheat producers, and Moscow also exports vast amounts of oil and gas. Egypt relied on Russia and Ukraine for 85% of its supply, as well as 73% of its sunflower oil, AFP reported.

Speaking in Algiers on March 30, US Secretary of State Antony Blinken said Russia's invasion of Ukraine is having a "deadly" impact and threatening security in the Arab world, particularly through spiralling wheat prices.

While Russia's invasion of Ukraine may seem distant, Blinken said, it already has had "deadly consequences for citizens in the region", particularly with regard to rising food prices, and the price of wheat in particular.

This poses "grave threats to security" in Arab countries, he said.

In light of this threat, the Egyptian government has taken a raft of measures to mitigate the impact.

Government measures

Domestic measures include increasing the area of land used for wheat cultivation, boosting crop productivity through the use of innovative agricultural techniques and raising the procurement price for wheat to incentivise farmers.

Other incentives include the provision of free fertilisers to farmers who supply 90% of their production to the government, and fining farmers who do not deliver the minimum set percentage of their production: 12 ardebs per feddan.

"Egypt currently imports 13.6 million tonnes of wheat annually, mostly from Ukraine and Russia," said Ragab Abdel Hafeez of the Agricultural Crops Division at the Federation of Chambers of Commerce.

Of this amount, he told Al-Mashareq, "8.6 million tonnes were imported last season from Russia alone".

The amount of wheat to be stored in silos will be "between five and six million tonnes", he said.

The government also will open 400 wheat delivery sites -- including silos and recently upgraded hangars -- and will regulate sales operations, with priority given to government marketing agencies and the Ministry of Supply, he said.

Additionally, he noted, "the government decided to stop the export of some types of grain, including wheat, bakery products and pasta, to ensure their availability in the markets".

Meanwhile, Egypt has begun opening new import lines, including from France and India, with new agreements to be announced very soon, he said.

France, which is the European Union's biggest wheat exporter, has pledged to help Egypt get the wheat it needs in the coming months as the war in Ukraine creates supply risks, Reuters reported March 28.

The opening of new import lines and stockpiling of locally produced wheat are expected to allow Egypt to obtain sufficient stocks for domestic consumption through the end of the year, Abdel Hafeez said.

Regulating subsidised bread

"Several decrees issued by the Egyptian government in the recent period are related to regulating the sale of subsidised bread," said Cairo bakery owner Hussein al-Khalea, who produces state-subsidised bread.

This is to ensure it is delivered solely to those who need it and to prevent waste and price manipulation, he told Al-Mashareq.

"All bakeries were informed a month ago of the need to tighten controls to the utmost, and to stop stockpiling flour to maintain its availability in the markets," al-Khalea said.

There are two types of bakeries in Egypt, he said: those that provide subsidised bread, and privately owned bakeries that produce various types of bread and baked goods.

The bakeries that sell subsidised bread produce 270 million loaves daily, he said.

The Ministry of Supply, which oversees these bakeries, insists that this figure remain stable and that the quality of the bread stay consistent, he added.

Warding off a bread crisis

Through its actions, the Egyptian government has been able to "ward off the spectre of a bread crisis", said Cairo food store owner Khaled Mohammed.

"The entire world is fearful [of a bread shortage] because of what is happening in Ukraine," he said.

The government's actions are reassuring for Egyptians, he said, pointing out that it has issued decrees to regulate the supply of wheat and curb the anticipated rise in prices.

It also has taken steps to prevent merchants from taking advantage of the crisis, he said, noting that Ministry of Supply teams patrol the markets and fine those who raise prices excessively.

Wheat traders regard the government's measures as a move to protect national security and the Egyptian people, he said.

In another move to mitigate the fallout of Russia's invasion of Ukraine, Saudi Arabia on March 30 deposited $5 billion in Egypt's central bank, AFP reported.

A day earlier, Qatar pledged $5 billion in investment, amid a surging wheat import bill.