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Sunday, 19 June 2022

Our Russian wheat imports jumped 84% March-May + We’ve started receiving funding from the ITFC

Egypt’s imports of Russian wheat climbed 84% y-o-y in the three months from March to May despite disruption caused by the war in Ukraine, Reuters reports. Freight data shows that Egypt imported almost 1.1 mn tons during the three-month period, up from 573k during the same period in 2021.

Wheat imports have still fallen this year, including from Russia: Egypt imported about 30% less grain — some 1.7 mn tons — from Russia between January and May. Total wheat imports fell 24% to 3.3 mn tons — meaning more than half of the grain we imported came from Russia, according to the newswire.

A bumper local harvest has helped to plug the supply gap: The state has now bought more than 4.1 mn tons of local wheat, marking the first time its buy in the local harvest has exceeded 4 mn tons, CNBC reports, citing Kamal Hashem, head of the state-owned Holding Company for Silos and Storage. The government is targeting the purchase of 6 mn tons this harvest season, which ends in August. Reserves are currently sufficient to last until the end of the year.

This isn’t to say that sanctions haven’t been a problem: Some Egyptian banks have been hesitant to transact with Russian banks due to Western financial sanctions on Moscow, according to traders. Importers have bought shipments from suppliers in other countries, such as the UAE and Switzerland, three traders said. Banks are requiring extra documents for cargoes of Russian wheat, one said.

The state has been working to ensure continued grain supply as Russia’s war in Ukraine stymies shipments and pressures global prices. The two countries accounted for some 80% of our imported wheat supply before the conflict broke out — and while some Russian shipments have continued, it’s been all but impossible for Ukrainian wheat to leave the country. Earlier this month we bagged our biggest wheat buy since the war in Ukraine broke out, with state grain buyer GASC purchasing 465k tons of Romanian, Russian, and Bulgarian wheat for shipment in July and August.

Ukrainian grain still isn’t moving — or is it? Russia is facilitating the movement of grain and oilseed exports from Ukraine through its occupied transit points on the Azov Sea, Reuters reported Russian officials as saying. “Russia is securing a 'green [safe] corridor' for grains and any other foodstuff such as oilseeds … so it can be exported from Ukraine without hurdles,” Russian Deputy Prime Minister Viktoria Abramchenko said, without clarifying from whom the goods had been procured. Ukraine has accused Russia of trying to sell its stolen crops, while Egypt has in the past turned away Russian ships allegedly carrying stolen Ukrainian wheat. Earlier UN-backed talks to establish a safe route to export Ukrainian grain through the blockaded Odessa port came to nothing.

Some food security diplomacy? President Abdel Fattah El Sisi used his virtual address at the opening of the 25th St. Petersburg International Economic Forum (SPIEF) to call for “an international effort and cooperation from all parties” to restore maritime traffic and grain and oil supply chains to normal, according to the Ittihadiya statement. He also said there should be “work to restore calm and stability at the international level, in order to alleviate the effects of this economic crisis.”

Meanwhile, we’ve been helping Russia secure new seed supplies: The Russian deputy PM said that the country has secured seed supplies from 11 nations, including Egypt, in a bid to ensure food security amid the sanctions.

IN OTHER COMMODITIES NEWS-

The global market could see less Romanian wheat: Romania is expecting a smaller grain harvest this year after last year’s record haul, thanks to weather conditions and higher production costs, Reuters quotes the country’s agriculture minister as saying. Romania harvested its most wheat ever (11.3 mn tons of grain) in 2021 — but while its expecting a smaller figure this year, there will still be a surplus for export, Agriculture Minister Adrian Chesnoiu said.

Romania is playing a role in our efforts to diversify supply: The state’s recent wheat purchase from Romania came as we look to add new grain suppliers — and we are eating more Romanian wheat, with Egypt looking into a potential barter agreement with the country that would see us trade fertilizer for its wheat.

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