Back to the complete issue
Sunday, 13 February 2022

Private sector eclipses GASC as Egypt’s leading wheat importer

The private sector was Egypt’s leading wheat importer last year: Private sector wheat imports surpassed purchases by the state-run General Authority for Supply Commodities (GASC) in 2021 — and could continue to lead Egypt’s wheat imports, Reuters reports, citing industry experts.

In numbers: The private sector imported 6.9 mn tonnes of wheat last year, an 11% y-o-y rise and almost 50% more than GASC, whose imports fell 32% y-o-y to 4.7 mn tonnes, Reuters reports, citing data from the UN’s Food and Agriculture Organization (FAO) and two regional traders. GASC accounted for some 51% of wheat imports in 2020, with around 30 private sector companies importing the remainder.

Subsidy reform could mean that 2021 isn’t an anomaly: “If GASC wheat purchases decline in the next years as expected due to potential reforms in the subsidy system, a sector of the consumers of the subsidized bread will turn to the free market bread,” FAO Representative in Egypt Nasredin HagElamin told Reuters. The Supply Ministry is working on several scenarios that would see the government taper bread subsidies as rising international prices pressure the state budget, with a final decision expected at the end of March.

Spiraling global wheat prices are squeezing the state purse: The rise in global wheat prices will cost us an additional EGP 12 bn this fiscal year, Finance Minister Mohamed Maait said last month. GASC had been allocated some EGP 87 bn in this fiscal year’s state budget. As the world’s biggest importer of wheat, we’re significantly exposed to price hikes that saw the grain trade in 2021 at its highest levels in more than a decade amid the global commodities squeeze. Prices have continued to rise this year on fears that major producers Russia and Ukraine could go to war.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.