Back to the complete issue
Sunday, 12 March 2023

Egypt wants out from UN grain treaty

Egypt to exit UN grain treaty by end of June: Egypt will withdraw from the multinational Grains Trade Convention (GTC) in less than four months, sparking concern amongst member countries, Reuters reports. Cairo last month gave notice that from 30 June 2023 it will no longer be part of the convention, which came into effect almost 30 years ago to improve cooperation between grain exporters and importers.

Is it about saving FX? The government decided to leave the convention to stop paying the USD-denominated membership fees, especially because it was felt that no benefits have been garnered from membership, a government source with knowledge of the matter told Enterprise on condition of anonymity. Officials from the Foreign Ministry said something similar to Reuters, which reported that the trade and supply ministries reviewed Egypt’s membership in the convention and found it to be of no “added value.”

Egypt apparently owes money to the International Grains Council: Two sources reportedly told the newswire that Egypt owed membership fees to the International Grains Council (IGC), which oversees the convention.

Other members aren’t happy: “This came without prior information. Several delegations within the IGC are surprised and sad about the decision,” Arnaud Petit, executive director of the IGC, told Reuters. Petit thinks that several members are going to ask Egypt to reconsider its decision. Thirty-four grain exporters and importers are currently party to the convention, including some of Egypt’s biggest suppliers.

Egypt was among the earliest entrants to the convention, signing it when it first came into effect in 1995. The country is also a member of the IGC.

REMEMBER- War in Ukraine sent international grain prices soaring last year, forcing Egypt — the world’s largest importer of wheat — to rely more on the local harvest, diversify the source of its imports, and pivot from international tenders to direct purchases on the global markets.

DFIs are lending a hand: Money from the World Bank is helping to fund a series of international wheat purchases while the government is in talks with the European Investment Bank to secure investment to establish a large silo as part of efforts to improve the country’s food security.

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.