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The UAE could help us pay for wheat imports: The government is currently in talks for some USD 400 mn in financing from the Abu Dhabi Fund for Development to help finance Egypt’s wheat imports, Supply Minister Ali El Moselhy told Bloomberg on Friday.
The details: The funds, which would be set up as a USD 100 mn revolving loan agreement disbursed in four tranches, would finance grain purchases from the UAE company Dahra as well as other commodities, Reuters quoted El Moselhy as saying. The minister did not indicate when the agreement is expected to close.
Remember:International lenders have helped Egypt pay for wheat imports since the conflict in Ukraine upended global food markets and triggered an FX crunch at home. The World Bank and the International Islamic Trade Finance Corporation(IFTC) have together provided bns of USD in loans for wheat imports amid higher wheat prices and difficulties making payment due to the FX crunch.
EGYPT REACTS TO: THE END OF THE BLACK SEA GRAIN PACT-
Egypt says it will keep importing Ukrainian wheat, despite Russian blockade:Egypt will continue to import Ukrainian grain via Europe, El Moselhy said, despite Russia’s decision to withdraw from the UN-backed Black Sea grain pact last week and resume its blockade on the country’s ports. “We are not happy with Russia’s withdrawal from the United Nations grain export agreement,” the minister said, urging Russia to rejoin the agreement.
Supply Ministry downplays impact on Egypt’s food security: “It is now too early to deci de what the repercussions are of stopping the grain agreement between Russia and Ukraine,” Assistant Supply Minister Ibrahim Ashmawy told Sputnik. “Egypt is closely monitoring what is happening in the global markets, and carefully following commodity changes.”
Ukraine + Russia were key suppliers prior to the war: Egypt is the world’s biggest importer of wheat and relied heavily on Ukrainian and Russian shipments. The two countries provided around 80% of Egypt’s wheat imports prior to the war, and accounted for more than a quarter of global supply .
The conflict has forced Egypt to diversify: Faced with the loss of Ukrainian and Rus sian wheat, Egypt stepped up efforts to find new foreign suppliers and increase local wheat cultivation. The local harvest, which runs until August, has so far brou ght in 3.8 mn to ns o f wheat this year, according to El Moselhy. The government procured 4.2 mn tons from local farmers last year. The country currently has 5.2 months of wheat in reserve, Reuters quoted El Moselhy as saying.
The market reaction hasn’t been overly dramatic: US wheat futures are now 4.7% higher since Russia exited the pact last Monday after the benchmark contracts fell 4.1% during trading on Friday.
