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Monday, 26 November 2018

Rising tension in Ukraine could threaten flow of wheat, tourists to Egypt

Rising tension in Ukraine could threaten one of Egypt’s key sources of wheat and tourists: Ukraine, one of Egypt’s top suppliers of wheat, faces turmoil this morning as the country’s president, Petro Poroshenko, said overnight he would “propose that parliament declare martial law in the country after the Russian military attacked and seized three Ukrainian navy ships in the Black Sea.” The news has sparked speculation in the Western press that Poroshenko might use martial law as grounds to postpone Ukraine’s March 2019 presidential election, raising questions about what all this means for one of our more important sources of grain and tourists.

Ukraine is one of Egypt’s top three wheat suppliers (whether you go by UkrAgroConsult’s estimate of 2.5 mtpa or the much lower figure pushed by the US Department of Agriculture). Egypt inked earlier this month a memorandum of understanding with the Ukrainian Sea Ports Authority to ease the flow of grain into Egyptian ports. The country was also Egypt’s second-largest inbound tourism market (at nearly 800k visitors) in 2017 and delivered a 44% increase in arrivals to Egypt in 1H2018.

Ukraine’s latest clash with Russia is front-page news this morning in the global business press as the European Union and NATO call for restraint and the UN Security Council says it will meet (FT | WSJ | Bloomberg | Reuters | CNBC).

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