The government is already in talks with “at least” one bank over its planned wheat hedging program, an unnamed government official tells Bloomberg. According to the source, the plan to hedge against volatile global wheat prices is still “in the early stages,” but the news information service notes that introducing such a program would be “a dramatic development” in the global wheat market. If wheat prices stabilize at their current levels, Egypt would spend around USD 3 bn on purchasing the commodity this year alone, according to Bloomberg News estimates. Fees to insure the country’s wheat import needs are estimated at around USD 150 mn. Meanwhile, the wheat tender Egypt launched on Tuesday helped global wheat prices inch back up after prices had slid one day earlier on the back of Russia “playing down the possibility of export restrictions,” according to Reuters.

Background: We reported on Monday that the Finance Ministry is looking to initiate a program to hedge against volatility in global wheat prices in a manner similar to its fuel hedging program, as part of a series of initiatives announced by minister Mohamed Maait to keep fiscal spending under control.