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Monday, 27 June 2022

We’re getting a third of the Indian wheat we’d hoped for + Bread could get browner

The Madbouly government has inked a contract to buy 180k tons of wheat from India, which should be heading our way soon, Supply Minister Ali El Moselhy said at a presser yesterday, where he spoke broadly on our wheat import policies in FY2022-2023, according to Reuters and Bloomberg.

We were hoping for more Indian wheat: This is a little over a third of the 500k tons we had originally expected to receive from India — but we hadn’t signed final contracts on the order before New Delhi imposed a ban on exports last month. As a semi-exemption from the restrictions following negotiations, the supplier agreed to ship us the 180k tons that were already in port before the export ban was imposed, El Moselhy said.

…And more Russian grain: We’re in talks with Russian suppliers on a potential wheat purchase, Moselhy added. While the Ukraine conflict has blocked all imports from Ukraine — once a key supplier to Egypt — wheat has continued to roll in from Russia, with imports from the country even climbing 84% in the three months to May, though they remain down YTD.

Egypt’s total wheat imports for FY2022-2023 are expected to come in at 10 mn tons, with the state looking to import some 5-5.5 mn tons of that during the upcoming fiscal year, the minister said, according to Bloomberg Asharq.

We’re relying more on local wheat — but it’s not coming cheap: Increasing local wheat procurement prices is costing the state an additional EGP 22 bn, El Moselhy said (watch, runtime 8:40). Farmers are receiving EGP 865-885 per ardeb of wheat they sell to the state, after the government raised the price of local wheat in a bid to encourage farmers to sell more of their crop to the government. The government will spend around EGP 36 bn to purchase 6 mn tons of local wheat this harvest season, which ends in August, the Finance Ministry has said. It had at last count bought more than 4.1 mn tons so far.

Extracting more flour per ton of wheat could trim 500k tons off our wheat imports in FY 2022-2023, El Moselhy also said (watch, runtime: 26:54). The plan would see the government raise the percentage of flour extracted from wheat after milling and sifting to 87.5%, from 82% currently. Flour with high extraction rates has more bran and germ content, which makes it generally healthier than highly refined flour, El Moselhy added. Your average white flour has an extraction rate of around 72%, while whole wheat flour has a 100% extraction rate.

Sweet potato bread is also on the table: The government is also looking into technology that would allow it to swap out wheat for sweet potatoes in bread production, the minister said. If successful, using sweet potatoes would cut 10% of the state’s current wheat consumption.

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