Econostrum | Economic News in the Mediterranean

France to help Egypt with wheat supplies

Written by Frédéric Dubessy on Tuesday, March 29th 2022 à 17:00 | Read 234 times

Ukrainian wheat may no longer arrive in Egypt (photo: DR)
Ukrainian wheat may no longer arrive in Egypt (photo: DR)
EGYPT / FRANCE. On the occasion of an official visit to Cairo on 27 and 28 March 2022, Bruno Le Maire said, "we will be at Egypt's side to ensure that it gets the wheat it may need in the coming months". The French finance minister was responding to a statement by Egyptian Prime Minister Mostafa Madbouli that his country was "counting on France to guarantee the supply of basic products such as wheat."

Egypt is heavily dependent on cereal imports, and is the world's largest importer. In 2021, more than 80% of the 13 million tonnes of wheat imported by the state (which subsidises its price to the tune of €3 billion for 72 million inhabitants) and by the private sector came from Ukraine (61%) or Russia (23%). The current conflict, which is disrupting production and exports (6 million tonnes of wheat and 9 million tonnes of maize are reportedly blocked in Ukrainian ports), is therefore seriously threatening its supplies. And yet wheat is the basic food of its 105 million inhabitants. They consume twice as much bread as the world average. Since the second half of 2021, the price of the traditional round cake - although it has been reduced from 110 to 90 grams - has soared, even when sold at one twentieth of its cost, the increase is significant because of a 23% rise in the price of wheat in February 2022.

According to its government, between its strategic reserves and the local harvest scheduled for mid-April, Egypt has sufficient stocks until the end of 2022. But not beyond. The Egyptian state will therefore increase its purchases on the local market, and even double them. With this in mind, it will oblige producers to sell at least 60% of their harvest to it.

A solidarity initiative on cereal stocks

On Thursday 24 March 2022, France, which holds the rotating presidency of the European Union, proposed an international food security plan called the Food on Agriculture Resilience Mission (Farm). Among the actions planned is a solidarity-based system for releasing surplus cereal stocks to distribute them fairly to the neediest countries. Paris has associated the African Union (AU) with this initiative and hopes that the World Food Programme (WFP) will also join. It should make it possible to release $595m (€534.5m) in immediate response to this crisis, which could lead several countries to famine.

As the European Union's largest wheat exporter, France will have an important role to play in this matter. Even if it only occasionally supplies wheat to Egypt today (notably to the public buyer GASC - General Authority for the Supply of Food) and its product is less adapted to Egyptian milling standards. French wheat tends to contain more moisture than Black Sea wheat, and above all, it is more expensive than the latter.

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