State makes its biggest wheat buy in a decade as futures dip: State grain buyer GASC last week purchased 815k tons of wheat for shipment in August, September and October, state news agency MENA reports, citing the authority. The purchase of French, Romanian, Russian, and Bulgarian wheat in last Wednesday’s tender was GASC’s largest since at least 2012, Bloomberg data shows.

The breakdown: The order was for 350k tons of French wheat, 240k tons of Romanian wheat, 175k tons from Russia, and 50k tons from Bulgaria. This is the third successful tender GASC has launched since Russia invaded Ukraine. Pre-war, the two countries supplied north of 80% of our wheat imports.

We locked in the grain while prices are lower: GASC bought the wheat at around USD 430-440 per ton on a cost and freight (C&F) basis, with the cheapest prices coming from Romania and the most expensive from France, Reuters reports, citing traders. That’s around 8-10% cheaper than GASC’s last purchase of mostly Romanian wheat in June, though still 58% above prices from the same period last year. Unusually, the purchase is for shipments spread out over several months rather than a matter of weeks, Bloomberg notes, suggesting GASC looked to lock in the greatest amount of grain possible while the price was right.

You can thank recent recession predictions: The outbreak of war in Ukraine at the end of February sent grain prices to a 14-year high and spurred talk of a global food security crisis. But murmurs of a looming global recession as central banks attempt to bring down inflation has cooled the markets. Chicago futures are now trading at their lowest price since February, having fallen by a third since the middle of May.

French grain on the rise? This latest tender offers fresh evidence that France is becoming an important supplier to Egypt after war in Ukraine blocked shipments from the country. France has pledged to support us on food security and led the suppliers in GASC’s first successful tender since war broke out in Ukraine, while the second tender in June was fulfilled by Romanian, Russian, and Bulgarian suppliers. We’ve also been purchasing cargoes directly from suppliers, including most recently a 180k-ton shipment from India.

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 (with the remainder purchased by the private sector), Supply Minister Ali El Moselhy said last week.

HOW ARE WE PAYING? We’re getting that USD 500 mn loan from the World Bank to boost our food security after the multilateral lender on Wednesday approved extending us the loan first announced in June, according to a statement (pdf). The loan will go towards wheat imports to cover the equivalent of one month’s supply for the nationwide bread subsidy program, the statement read. It will also help upgrade and expand wheat silos and up domestic cereals production in efforts to improve climate resilience.

The breakdown: An earlier World Bank document (pdf) said the program would provide USD 350 mn to GASC to purchase up to 700k tons of wheat; USD 117.5 mn to raise silo capacity, increase the use of high-yielding types of wheat, and improve climate resilience; and USD 2.5 mn to manage the project.