Egypt relied on competitive Russian wheat as imports dipped in 2022 -data


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CAIRO — Egypt relied more heavily on Russian wheat imports last year despite a sharp drop in its imports of the grain and moves to diversify the sources of its wheat purchases, data seen by Reuters shows.

Though Egypt’s wheat imports from Russia fell by 6.7% in 2022, Russia’s share, including purchases by Egypt’s state grains authority and the private sector, rose to 57% from 50% in 2021.

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That partly made up for a fall in shipments from Ukraine, which accounted for 8.9% of Egypt’s wheat imports, down from 28% in 2021.

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The war in Ukraine disrupted wheat purchases by Egypt, one of the world’s top buyers, and the government held talks with countries including India as it tried to diversify away from Black Sea supplies.

Economic fallout from the war also triggered a foreign currency crunch in Egypt, leading to a slowdown in overall imports, a backlog of goods in ports, and a $3 billion financial support package from the IMF.

Egypt maintains close political ties with Russia, but officials and traders say the preference for Russian wheat has been driven by cost, paid for in dollars.

“It’s about the prices of course. We tender, and we check free-on-board and freight costs and then we buy no matter the origin,” Supply Minister Ali Moselhy told Reuters last week.

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While traders have said there were some payment complications due to sanctions against Russia, with banks requesting more documents, Russian wheat currently remains the most competitive, with the state buyer purchasing more than two million tonnes in recent months.

“Russian wheat is dominating despite all the problems with higher ship insurance costs and winter weather in the Black Sea,” said one European trader.

Egypt’s total wheat imports fell 18.7% to around 9.5 million tonnes in 2022 amid climbing prices and the foreign exchange crisis that left private mills and importers unable to pay for wheat stuck at ports, said Mohammed El Gammal, a Cairo-based grains consultant for the U.N. Food and Agriculture Organisation, adding imports were the lowest since 2013.

In addition to Russia, shipments from Romania were down 35% to 1.3 million tonnes and Ukraine 74% to around 845,587 tonnes.

The private sector was able to diversify some of its purchases, with rare shipments from the United States, India, and Brazil making their way to ports.

There was also an uptick in shipments from France, which quadrupled to 1.26 million tonnes. (Additional reporting by Michael Hogan; editing by Aidan Lewis and David Evans)


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