The war between Russia and Ukraine has created concerns about a potential global wheat supply crisis, with Middle Eastern countries losing the most, especially because they depend on both countries for their staple food.
Russia and Ukraine together make up 29% of the world’s wheat exports, with the Middle East being the main buyer. If Russia occupies Ukraine’s port of Odessa, it could essentially disrupt Kyiv’s wheat supply to the Middle East and North Africa. Egypt, which imported about 50% and 30% from Russia and Ukraine last year, remains the number one grain importer in the world.
Egypt’s Directorate General of Merchandise (GASC) buys wheat and supplies more than 60 million of the country’s more than 105 million people with heavily subsidized bread. Since the invasion of Russia, GASC has been forced to cancel two bids due to high prices and lack of offers. Currently, two cargoes are moored at the port of Ukraine.
Taking into account Egypt’s wheat stockpile and the local supply that will soon be added to inventory, the country has enough grain for nine months, said Ibrahim Ashmawi, Minister of Deputy Supply and Internal Trade. Reuters..
But for future imports for the rest of the year, “we will investigate the EU for proximity, but we will not exclude other exporters like the United States, Kazakhstan and Romania,” he said. I added.
The Egyptian government plans to add an additional $ 950 million to its current budget to make up for the high wheat prices. In addition, supplies from strategic stockpiles can be depleted.
As of March 7, Ezzat Aziz of the Cairo Chamber of Commerce said local wheat prices had risen 23% and flour prices had risen 44%. Reuters..
Lebanon is another major wheat importer and can be significantly affected by the Ukraine crisis. When the Russian army entered Ukraine, the country had a stockpile of wheat for only a month. Lebanon imports 60% of wheat from Ukraine.
“They import a lot of wheat from Ukraine and Russia, but also a lot of flour. Where is the flour milled? It is milled in Egypt, Turkey and the United Arab Emirates. And they. Where do you get wheat? They get it from the Black Sea, “Joe Glauber, a senior researcher at the Institute for International Food Policy in Washington, told the Washington Post.
“There are a lot of knock-on effects that we’re starting to discover but don’t think they’ll show up right away.”
In Tunisia, the government reportedly banned authorities from discussing wheat imports. Bread inventory is running low and the store is distributing flour. In Syria, the government has begun distributing wheat.
Libya, Algeria, and other oil-producing countries are also exposed to rising wheat prices, but some of the additional costs can be offset by higher rates from the sale of hydrocarbons.
China is said to have a large surplus of wheat, which accounts for about 50% of the world’s inventories, so it may try to take advantage of this situation.
For example, the Egyptian government has supported Beijing on issues such as the persecution of Muslims in the Xinjiang Uygur Autonomous Region. Not only did Egypt arrest and deport Uighurs in 2017, but also supported China’s policy on the 2019 Xinjiang Uighur Autonomous Region in a letter to the United Nations.
China aims to strengthen relations in the region by providing a small portion of its reserves to struggling countries such as Egypt.
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Naveen Athrappully is a news reporter on business and global events in The Epoch Times.