CAIRO, EGYPT — The government of Egypt in late May asked the World Bank for help in ensuring wheat supplies.
Through the Emergency Food Security and Resilience Support Project, Egypt is seeking $500 million to “ensure the short-term supply of wheat for uninterrupted access to bread for vulnerable households and to strengthen Egypt’s resilience to food crises.”
According to a document issued by the World Bank, the project would consist of three components providing a balance between short-term response and medium-term resilience to food crises. The first component requires $380 million for emergency response measures, specifically to address the shortfall in imports of wheat and to minimize the disruptions in the bread subsidy program. The funds would be used to finance the public procurement of up to 700,000 tonnes of imported wheat, the World Bank said.
The second component requires $117.5 million for strengthening preparedness and response to shocks. The World Bank said the funds would be used to reduce wheat losses, improve domestic cereal production and strengthen farm-level resilience and preparedness to shocks.
The third and final component requires $2.5 million for project management and knowledge management.
Providing context on Egypt’s need for the financing, the World Bank identified several factors that have put the country in a precarious position. One such factor has been the war between Russia and Ukraine.
“As the largest importer of wheat in the world, the Ukraine war has delivered a major shock to Egypt,” the World Bank noted. “Wheat is a key staple food commodity in Egypt. It represents 35% to 39% of per capita caloric consumption on average. Wheat imports account for nearly 62% of total wheat use in the country. Egypt imports approximately 85% of its wheat from the Russian Federation (60% to 66% depending on years) and from Ukraine (20% to 25% depending on years) combined.
“Before the Ukraine war, Egypt’s wheat imports in the 2021/2022 marketing year were estimated at 12 million tonnes. The latest US Department of Agriculture forecast (March 28, 2022) suggests that Egypt’s imports in 2022 will be down by 8.3% i.e., by around 1 million tonnes, which is more than one-month of the consumption under the Egyptian Bread Subsidy Program.”
Egypt, the world’s biggest wheat importer, on June 2 made its largest wheat purchase since Russia’s invasion of Ukraine in late February, according to a Reuters report.
The General Authority for Supply Commodities (GASC), Egypt’s state grains buyer, said it purchased 465,000 tonnes of wheat in an international tender, including 175,000 tonnes from Russia, 240,000 tonnes from Romania and 50,000 tonnes from Bulgaria.
Traders told Reuters the cargoes were purchased at cost of $480 per tonne, an increase of 41% from Egypt’s last purchase before the invasion.