‘Millions vulnerable’: Egypt hit hard by rise in global wheat prices

As the UN climate change summit continues in Glasgow, the Middle East’s most populous country, Egypt, is reeling under the effects such changes are having on international wheat output.

A tight supply of stock and strong international demand have caused wheat prices in the international market to rise to their highest since 2012.

To add to the pressure, Russia, one of Egypt’s most important suppliers, has imposed taxes on wheat exports.

Coming on top of a poor spring harvest, this has all spelt very bad news for Egypt, the world’s largest wheat importer.

On 1 November, the General Authority for Supply Commodities, Egypt’s wheat buyer, booked 180,000 tonnes of Russian milling wheat at $332.55 per tonne.

This was almost $5 higher than what the authority paid for wheat from its main suppliers, Russia, Romania and Ukraine, less than a week earlier.

The latest price is also about $80 higher than what was projected in the government’s budget for the fiscal year 2020/2021.

This wide gap between expectations and reality, said analysts, throws light on the challenges climate change is posing to countries’ abilities to secure their food needs.

“Climate change is having a heavy toll on agricultural output, not only here but everywhere else in the world,” Mohamed al-Qersh, the official spokesman for the Egyptian Ministry of Agriculture, told Middle East Eye.

“The world must act together to prevent the effects of the change from having a wider scope in the future.”

If Egypt imports the same amount of wheat this fiscal year as the previous year, its wheat import bill will grow almost $1bn.

The financial harm to the country could even be more intense if the wheat price rises even more in the coming weeks, especially with pessimistic forecasts about output and growing international demand.

The additional money Egypt has to spend because of the rise in the international market wheat price compounds the problems climate change is already causing the country.

Global warming has caused massive devastation to agricultural production when it comes to important crops, such as mangoes and olives.

The rise in the Earth’s temperature also threatens to submerge some of Egypt’s low-lying areas near the northern Mediterranean coast.

Such a scenario would mean Egypt losing some of its most fertile farmland, especially in the Nile Delta, and cause major displacement among Delta residents.

Some of those attending the summit in Glasgow cited Egypt as they rang the alarm bells over the dangers climate change is causing to coastal areas.

Meanwhile, Egypt is seeking to mitigate the impact of rising international wheat prices.

One measure is to encourage local farmers to grow more wheat, with the government raising what it pays local farmers for the cereal by 20 percent for the new season.

“The latest rise in wheat prices will encourage farmers to grow more wheat,” Saddam Abu Hussein, the head of the Farmers’ Union, the independent guild of the nation’s farmers, told MEE.

“Farmers abstained from growing wheat in the past because the government bought it for a low price.”

Egypt cultivated 1.47 million hectares with wheat in 2020, while national wheat output was 8.9 million tonnes last year.

Middle East Eye

Tags: International market, Ukraine, Russia, wheat prices, Egypt, Romania, price, wheat, wheat exports