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.