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Tuesday, 8 February 2022

Gov’t ups local wheat purchase targets by over 10% y-o-y

Egypt to buy 4 mn tonnes of local wheat this season: Egypt plans to purchase 4 mn tonnes of wheat from local farmers this season, up from 3.6 mn tonnes last year, Supply Minister Ali El Moselhy said yesterday, according to a ministry statement. The amount would cover the equivalent of some 19% of local consumption for the 12 months to the end of September 2022, on the basis of the most recent estimates (pdf) from the US Foreign Agricultural Service.

More wheat at higher prices: The government is paying 13% more for local wheat this year than it did in 2021, after a global supply squeeze saw prices hit a new ten-year high. The price hikes are expected to take an additional EGP 12 bn out of the state budget this fiscal year, and the Supply Ministry is currently preparing to taper bread subsidies to soften the impact of rising prices. Meanwhile, the looming conflict between Ukraine and Russia is already pushing prices for imported wheat yet higher. The world’s largest wheat importer, Egypt is also the largest consumer of Ukrainian wheat, last year purchasing the equivalent of around 14% of its total wheat consumption from the eastern European country.

Other things we’re keeping an eye on this morning:

  • Banque Misr will invest (pdf) USD 201.1 mn in African Export-Import Bank (Afreximbank), of which USD 80.5 mn is paid-in. This increases BM’s stake in Afreximbank to 5.8% from 3.1%, making it the bank’s largest non-sovereign shareholder.
  • The Financial Regulatory Authority has directed (pdf) Egyptians for Housing Development & Reconstruction (EHDR) to delay for 60 working days its offer to acquire a 51% stake in Emerald Real Estate through a share swap that would raise EHDR’s ownership in the firm to 90%.
  • Kuwait Airways will launch direct flights to Sharm El Sheikh, Alexandria and Sohag in May.

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