Egypt secures EU financing for wheat storage and logistics

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What we're tracking today

TODAY: Egypt’s wheat storage gets EU funding + PMI season is here

Good morning, folks. It's a very sluggish news cycle as we hit Ramadan’s first hump day, but this morning yields the latest on Egypt’s wheat storage activities and PMI readings from around the region. First, it’s official…

THE BIG LOGISTICS STORY- Trump’s Canada and Mexico tariffs land: Trump officially slapped 25% tariffs on Canada and Mexico starting today, effectively leaving no further room for talks. The levies — initially postponed for negotiations — largely aim to pressure both countries on the alleged issues of border security and fentanyl trafficking and to force Canada and Mexico to shift their manufacturing to the US. Canadian Foreign Minister Melanie Joly warned that Ottawa is “ready” to hit back with retaliatory measures.

China isn’t off the hook either: Trump signed off on doubling tariffs on Chinese imports to 20%. The White House justified the move by accusing Beijing of failing to curb illicit fentanyl shipments to the US. The directive goes into force today.

Retaliation is set: Chinese imports of US agricultural products are expected to drop further in 2025 as Beijing prepares to impose reactive measures against the tariffs. US agricultural exports to China have already been on the decline, dropping 14% y-o-y in 2024 to USD 29.95 bn.

MARKET REAX- The S&P 500 slid around 1.8%, marking its worst day since December and wiping out its year to date gains. The Dow Jones Industrial Average tumbled 1.5% and the Nasdaq fell 2.6%, as fears over US economic fallout materialized. Tech stocks also slid, with Nvidia tumbling over 8%.

WATCH THIS SPACE-

#1- China eyes Algeria for EV production: China’s SFE GROUP has pitched to the Algerian government a plan to set up an EV production facility in the 150-hectare Horchaia Industrial Zone in Naama Province, Algeria, according to a statement issued last week. The project’s plan is still in a preliminary phase, with final approvals and procedural sign-offs still pending. We still don’t have a timeline or an investment ticket.

The plant’s production will target both domestic sales and exports to African and European markets, with an annual production ranging between 50k and 200k EVs per year.

About Horchaia zone: The Horchaia Industrial Zone consists of 151 land plots in the Naama province, and has seen investments from paper pulp manufacturer General Emballages for a DZD 37 bn (c. 274.4 mn) plant. Algerian Iron and Steel Company and Chinese public conglomerates SDM and CAMCE were also exploring a possible iron ore conversion project in the zone.

ALSO- Algeria is already exporting EV chargers: Algeria’s state-owned Sonelgaz subsidiary, SAEG, has started exporting EV charging stations to Italy and Libya back in September, delivering 433 units under the first phase of its contracts with both countries. SAEG has also signed multiple agreements to supply its locally assembled charging stations to other European and Middle Eastern markets.

#2- Airbus’ output and deliveries bumped in February, delivering between 35 and 39 aircraft, Bloomberg reports, citing data by aviation market analysis outfit Cirium Ascend. With subpar delivery rate of 25 jets in January, February figures bring the aviation giant’s deliveries to about 59-64 deliveries this year, the slowest production rate for the planemaker since 2021. The company delivered 79 jets in January and February of 2024.

A turbulent takeoff for 2025: Airbus’ deliveries eased in January, dropping what was estimated at the time to be a 26% y-o-y dip, on the back of an engine shortage. This followed an agreement with engine supplier CFM to accelerate some delayed deliveries originally scheduled for December.

REMEMBER: Airbus set a target of 820 commercial aircraft deliveries for 2025. For the A350 aircraft, the company has set a target rate of 12 aircraft in 2028 and will adjust the entry-into-service of the A350 freighter variant — now expected in 2H 2027 rather than 2026.

MARKET WATCH-

#1- Oil prices fell this morning on news that Opec+ is going ahead with the planned supply hikes in April, Reuters reports. Brent crude futures decreased by USD 0.49 to USD 71.13 a barrel, while the US West Texas Intermediate (WTI) fell by USD 0.26 to USD 68.11 a barrel by 07.20 GMT.

What Opec+ is saying: Opec+ cited “healthy market fundamentals” and a “positive outlook” for its decision, but kept the door open for future changes in policy, saying the increase may be paused or reversed depending on market conditions, according to a statement. “This flexibility will allow the group to continue to support oil market stability,” the statement said.

The UAE is getting its production hike: The UAE is set to see a higher production quota of 3.5 mn barrels per day (bpd) in 2025, up from the current 2.9 mn, after the oil cartel agreed to raise its production quota last year.

ALSO- Kazakhstan exceeds its Opec+ quota: Kazakhstan reportedly bumped crude oil and gas condensate production 13% m-o-m in February to around 2.1 mn bpd, surpassing its Opec-mandated limit of around 1.5 mn bpd, sources familiar with the matter told Reuters.

Opec+’s crude production is already on the rise, reaching 27.4 mn bpd in February, an increase of 240k bpd, its highest since December 2023, Bloomberg reports. The UAE raised its output by 70k bpd — which Bloomberg claims is 400k bpd over an agreed limit — as shipments to Japan and China rose. Iraq and Venezuela also drove the uptick in production.

MEANWHILE- Saudi Arabia and Algeria cut LPG prices for March: Saudi Aramco and Algeria’s Sonatrach lowered the official selling prices for liquefied petroleum gas for March by 0.9%-3.2% compared to February on the back of lower oil prices and weaker global demand, traders told Reuters. Aramco's March price for propane was cut by USD 615 per metric ton, while butane prices were down to USD 605 per metric ton.

#2- Baltic index maintains upwards trend: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — was up 47 points to 1,276 on Monday. The capesize gained by 162 points to 1,980, while the panamax index was down 18 points to 1,045. The smaller supramax index dropped 8 points to 887.

PSA-

#1- Hapag-Lloyd raises select FAK rates: Shipping giant Hapag-Lloyd will hike its Freight-All-Kinds (FAK) rate for vessels departing from Western Mediterranean ports and bound for the South American West Coast, Central America, and the Caribbean starting 1 April 2025, according to a statement. The rate will increase to EUR 200 for 20’ containers and EUR 300 for 40’ containers, affecting standard containers, reefers, high cube (HC) and special containers.

#2- Foreign trucks must secure the required local permits to transport goods within Saudi Arabia, Saudi’s Transport General Authority said in a post on X. Failing to adhere to this will subject companies or individuals contracting the trucks to fines ranging from SAR 10k to SAR 5 mn. Additional penalties include temporary truck seizure, deportation of non-Saudi drivers operating without a license, and truck confiscation for repeat offenses.

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CIRCLE YOUR CALENDAR-

The UAE will host the Gulf Ship Finance Forum on Thursday, 10 April in Dubai. The forum will host shipping and finance executives from around the region and the world to host presentations, interviews and panel discussions on ownership, management, chartering, legal and trading in shipping.

The UAE will host the CargoIS Forum on Monday, 14 April in Dubai. The event will discuss industry insights and strategies from leading logistics players, including Emirates SkyCargo and Lufthansa Cargo.

The UAE will host the IATA World Cargo Symposium from Tuesday, 15 April to Thursday, 17 April in Dubai. The event will host sessions, specialized streams, workshops and summits related to technology, security, customs, cargo operations and sustainability for over 1.4k industry leaders.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

Egypt + EU ink EUR 90 mn agreement to bolster grain storage and logistics infrastructure

Egypt + EU sign EUR 90 mn funding to modernize wheat storage: Egypt has signed a EUR 90 mn concessional financing agreement with the European Commission to support food security, grain storage and logistics infrastructure, according to a statement. The money will come from the European Investment Bank and will help modernize Egypt’s wheat storage under the National Project of Silos (NPS), which aims to build more silos and expand capacity across 17 governorates, as well as reduce waste that sometimes reach up to 15%.

More incoming: The NPS is set to receive additional financing soon, with an additional EUR 100 mn from the EU and EUR 110 mn in soft financing from the World Bank.

All eyes on wheat in Egypt: The agreement aims to enable GASC to enhance its import capacity and bolster wheat storage efficiently. This marks the second time GASC has received funds to bolster food security after inking a USD 700 m loan agreement in February with the Islamic Trade Finance Corporation.

Soaring imports? The government is planning to source more wheat locally in a bid to cut wheat imports this year, after the country’s total wheat imports hit a 10-year peak at 14.2 mn tons in 2024, marking a 31.5% y-o-y increase. It is currently aiming to buy 4 mn tons of local wheat in 2025, an 11% y-o-y increase, with plans on importing some 6 mn tons of wheat from abroad, a 3.3% y-o-y drop from the year prior, Egypt’s Supply Minister Sherif Farouk said earlier this month. The country’s total wheat consumption in 2024 reached 20 mn tons and is expected to remain at the same level in 2025.

KSA, Kuwait and Egypt non-oil private sectors continue growth at a slower pace

How KSA + Kuwait + Egypt’s non-oil private sectors fared in February: Purchasing manager indices (PMI) tracking non-energy sectors in the three countries saw strong — albeit slower — reading across the board, all holding above the 50.0 mark threshold.

REMEMBER- The all-important 50.0 mark is the threshold separating contraction from growth. Anything above 50 denotes expansion, while anything below indicates contraction.

First up, Saudi Arabia: Non-oil business activity in the Kingdom continued robust expansion in February on the back of strong customer sales and increased levels of business activity, according to Riyad Bank Saudi Arabia PMI (pdf). The headline figure came in at 58.4 in February, dipping down from the over decade-high reading of 60.5 in January as new business growth cooled slightly.

The new orders subindex fell to a reading of 65.4 in February, down from 71.1 in January, according to data seen by Reuters. Non-oil firms continued to highlight strong growth in new order volumes, with some 35% reporting an increase in sales in February, compared to just 5% reporting a decline. The rise in demand was partly driven by global markets, as new export business increased sharply, while some companies reported attracting customers through price promotions.

Firms continued to increase their inventory — albeit at a slower pace, with purchasing seeing a slowdown in February. This was attributed to many firms having already accumulated inventory in previous months, Riyad Bank Chief Economist Naif Al Ghaith said.

Input price inflation continued to rise during the month, which was driven by higher material prices and wages. However, the rate of inflation eased slightly in February to its lowest level in four months. Despite higher input costs, the month saw a modest rise in output prices due to competitive pricing pressures.

Employment rose at its fastest pace in well over a year hitting its second-highest level in over 10 years. This comes as firms look to expand their operational capacity to prepare for growth opportunities.

Optimism remains high: Business confidence in Saudi Arabia reached their highest level in 15 months, as businesses conveyed optimism over economic growth and government initiatives that could help support their development and expansion.

In Egypt, non-oil business activity continued to rise for the second month running — but at a slower pace, “marking the first back-to-back improvement in business conditions in over four years,” according to S&P Global Egypt PMI (pdf). Egypt’s headline figure dipped to 50.1 in February from a 50-month-high of 50.7 in January. Last month’s figure represented the index’s highest level for Egypt since November 2020, and marked only the second time the country's non-oil activity has hit expansion territory during this period.

There’s been no better start to our year: “Coupled with January's upturn, the data reflects the best opening two months of the year in the survey's history,” S&P Global Senior Economist David Owen said.

Input cost pressures “remained relatively soft” compared to what was seen in 2024, which indicates that “inflation is likely to continue its downward trend, in the near-term at least,” Owen said. While some respondents cited increased cost pressures to a stronger USD, this was partly offset by a decline in staff costs. However, cost pressures were more felt in the manufacturing and construction sectors. Meanwhile, selling prices rose at a gradual rate in February, as businesses looked to “limit the pass-through of higher cost burdens to clients.”

Employment decreased for the third time in four months, as businesses faced challenges in retaining staff and hiring more workers, representing another “mixed” outing for the employment market.

Overall business sentiment in Egypt remains subdued: Firms’ expectations for overall business activity over the next 12 months dropped to their lowest since last November, with just 5% of businesses surveyed showing positivity towards future output trends. “Economic and geopolitical risks continue to loom large, contributing to another month of subdued expectations for the year ahead," according to Owen.

Meanwhile, in Kuwait: Non-oil activity continued to expand at a slower pace in February, as output and new orders increased again while overall rates of business expansion eased, according to S&P Global’s PMI (pdf). The country’s headline reading fell to 51.6 in February, down from 53.4 in January, still holding above the 50.0 mark for healthy growth.

New orders rose solidly during the month in response to advertising and price discounting, but the pace of expansion softened from January’s reading. New export orders were up in February, but saw their slowest increase in a year-and-a-half. Meanwhile, Kuwaiti non-oil companies lowered their purchasing activity throughout the month, in what was the first such marginal reduction seen in “close to three years.”

Output also increased at a steady rate, but at its slowest pace since last October. This was also linked to “successful marketing across a variety of different channels,” as well as competitive pricing.

Input costs saw a sharp increase despite inflation easing at the beginning of the year. Businesses lowered their selling prices for the second time in three months which may cause concern if input costs continue to rise. "Alongside successful advertising, growth was again predicated on the offer of discounts to customers, and it remains to be seen how sustainable this will be for firms in the face of sharply rising input costs,” S&P Global Market Intelligence’s Economics Director Andrew Harker said.

Employment was down for the first time in six months, but the dip was only a “marginal” one. However, the reduction in employment coming in tandem with rising new orders contributed to another increase in backlogs — the fifth such increase in as many months.

The outlook does bode well: Business confidence eased to a five-month low in Kuwait, but still remained higher than the series average.

Abu Dhabi’s non-oil foreign trade volume reached AED 306 bn in 2024

Abu Dhabi’s non-oil foreign trade climbed 7.6% y-o-y to AED 306 bn in 2024, according to Abu Dhabi Statistics Centre (SCAD) preliminary import and export data releases here (pdf) and here (pdf). Export volumes rose 12% y-o-y to reach AED 165.8 bn, while imports came in at AED 140.2 bn — a 2.8% y-o-y increase.

On a quarterly basis, 4Q 2024 saw non-oil foreign trade reach AED 83.1 bn. Exports reached AED 48.4 bn in trade volume, leaving imports to account for AED 34.8 bn.

Leading the growth in exports for 4Q 2024 was commodities, accounting for AED 14.2 bn in volume, and closely followed by manufacturing which produced AED 9 bn in exports. Machinery and transportation equipment came in at AED 8.6 bn, while chemicals and chemical products accounted for AED 5.6 bn.

On the import side, machinery and transport equipment accounted for the majority of imported trade during the fourth quarter, coming in at AED 14.3 bn. Manufactured goods once again took the second spot with AED 8.2 bn, followed by chemicals products.

ICYMI- The UAE’s non-oil foreign trade reached AED 3 tn last year, up 14.6% y-o-y, close to its AED 4 tn trade target by 2031. Abu Dhabi’s non-oil economy grew 6.6% and contributed 54% to GDP in 3Q 2024, which saw a 4.5% y-o-y uptick during the period, with the manufacturing, construction, and finance sectors bolstering the emirate’s economy.

Oman to build OMR 28 mn mutli-purpose fishing port in Masirah

Oman is getting a new fishing port: Oman inked a OMR 28 mn contract with Khimji Ramdas Contracting and Archimedes Marine Engineering to build a multi-purpose fishing port in Masirah, according to a statement. The port — spanning 15 hectares — will include 13 floating berths and a sand beach spanning 1.1 km as well as a breakwater extending 4.1 km along the facility. The port is forecasted to generate some OMR 23.5 mn and poised to net some 7.5k tonnes of white leg shrimps annually.

Oman’s shrimp exports: Oman exported about 419.5k kg of shrimps in 2023, at a value of USD 3.7 mn, according to World Bank trade data. The majority of shrimp exports in 2023 were earmarked for regional markets, with Egypt snapping about a third.

Not Oman’s first fishing port project: The country’s OMR 40 mn (USD 104 mn) Dibba Fishing Port located in the Musandam governorate is slated to be operational by 1Q 2025. Facilities at the port include an ice factory, a marine workshop, warehouses for fishermen, and others.

Updates on freight forwarding, maritime, and zones from the UAE, Oman and Egypt

FREIGHT FORWARDING-

#1- Dubai South inked an agreement with international freight forwarder UPS to open a new facility in its Logistics District, according to a statement. The facility — scheduled for operation by end-of-year — is slated to boost national freight forwarding capacity and is part of UPS’s strategic expansion plans into the region. The investment ticket for the project was not disclosed.

Dubai South is on a kick: Dubai South welcomed 415 new companies in 2024, bringing the total number of companies operating in the aviation and logistics development district to 4k, with a retention rate of 94% for existing companies.

#2- China’s CULines sets up shop in Dubai: Chinese freight forwarding firm CULines West Asia Company launched its Dubai headquarters last week as part of its strategic expansion across the region, according to a statement. CULines is currently expediting the development of its route network in the region, which aims to “play a pivotal role in linking our trunk and feeder networks” to enhance operational efficiency and collaboration, chairman Raymond Chen said.

SHIPPING + MARITIME-

Oman to establish maritime industry association: Oman’s Social Development Minister Laila bint Ahmed Al Najjar has issued a ministerial decision to establish the Oman Maritime Association, Muscat Daily reported on Sunday. The association will work with government agencies to provide advisory services to private stakeholders and specialized training and professional development services for industry talent. The decision was published on 19 February and will take effect upon its publication in the Official Gazette on an undisclosed date.

Operations will be overseen by a board of five to 12 members elected for a two-year term, with a limit of two consecutive terms before taking a mandatory break. The association’s budget will also be financed from member subscriptions, event revenues, and donations.

ZONES-

More Chinese firms land in Egypt’s West Qantara: Egypt’s Suez Canal Economic (SCZone) has inked a USD 4.5 mn agreement with Chinese textile manufacturer Gold Star Fashion for a project in the West Qantara Industrial Zone, according to a statement. The facility — spanning 23k sqm — will be fully dedicated for exports and foster the creation of more than 2k jobs.

Following the footsteps of other firms: SCZone inked two strategic agreements this week with Chinese textile firms for two projects in the West Qantara Industrial Zone with a total investment figure of USD 28 mn.

On a roll: The SCZone has so far attracted 15 companies to West Qantara, signing some 14 agreements over the last 20 months for new projects with total investments of USD 542.3 mn, the statement notes. The projects include a USD 30 mn factory by Chinese textile manufacturer Kelida and a USD 70 mn factory by Chinese dyeing and finishing outfit Zhejiang Hengsheng.

OTHER STORIES WORTH KNOWING THIS MORNING-

Royal Air Maroc expands cargo links: Moroccan airline Royal Air Maroc has added 30 tons of weekly cargo uplift for its China-Morocco routes. (Air Cargo Week)
Emirates expands its services to Asia: Dubai-based Emirates Airways is rolling out three new flight routes to China, Vietnam, and Cambodia, effective from mid-2025. (Statement)
Flydubai adds three new services to Iran: Dubai-based budget carrier Flydubai is launching three new services to Iran. (Statement)

Shipping giants could face a tough year in 2025 as trade warring intensifies

The shipping industry’s 2024 gains could be reversed as a result of intensifying trade wars and the potential rebound of Red Sea shipping, as the industry braces for an expected decrease in shipping volumes and rates, as a result, Bloomberg reports, citing a handful of industry experts and analysts. Last week, global shipping liner rates dipped 5.9% after falling below USD 3k per 40-ft container for the first time since May.

The US tariffs on Chinese goods and China-built vessels are expected to have a sizeable impact, with container shipping volumes expected to drop by 1.5-2% in 2025, Kepler Cheureux analyst Axel Styrman told the news outlet. The new levies could also result in increased unit costs for transpacific routes, Citi Bank analysts said. Shanghai-based Cosco Shipping is especially vulnerable due to its mix of Chinese-built vessels, with its profits forecasted to slip by over 50% this year after more than doubling last year – while Japanese and Taiwanese liners could benefit.

An increase in Red Sea shipping could cause container shipping demand to drop by around 6%, according to Styrman’s calculations. For players like the Shipping giant Maersk, a return to the Red Sea could see it barely break even in 2025 instead of its projected USD 3 bn in net income.

Some players may be underestimating the tariff impact: “It seems that [shipping firms] don’t believe that tariffs will hurt that market severely,” Styrman added. Hapag-Lloyd, for example, is predicting changes in the global trade flows rather than a drop in trade volume, Bloomberg reported. However, if the impact of both tariffs and the red sea route rebounds in 2025, coupled with expanding fleets, spot rates could see up to 40% y-o-y drop, Styrman warned.

Calendar

MARCH

24-25 March (Monday-Tuesday): Airbus Summit, Toulouse, France.

APRIL

2-4 April (Wednesday-Friday): Global Supply Chain and Logistics Summit, Amsterdam, The Netherlands.

3-4 April (Thursday-Friday): Africa Supply Chain Optimization, Johannesburg, South Africa

10 April (Thursday): Gulf Ship Finance Forum, Dubai, UAE.

14 April (Monday): CargoIS Forum, Dubai, UAE.

15-17 April (Tuesday-Thursday): Transport Middle East Exhibition and Conference, Aqaba, Jordan.

15-17 April (Tuesday-Thursday): IATA World Cargo Symposium, Dubai, UAE.

16-17 April: Global Ports Forum, Dubai, UAE.

28 April-2 May: 7th Export Capabilities Exhibition (Iran Expo), Tehran, Iran.

MAY

6-8 May (Tuesday-Thursday): Airport Show, Dubai, UAE.

12-15 May (Monday-Thursday): Saudi Smart Logistics, Riyadh, Saudi Arabia.

13-14 May (Tuesday-Wednesday): Global Ports Forum, Dubai, UAE.

20-22 May (Tuesday-Thursday): Seamless Middle East, Dubai, UAE.

27-29 May (Tuesday-Thursday): Saudi Warehousing & Logistics Expo, Riyadh, Saudi Arabia.

JUNE

1-3 June (Sunday-Tuesday): Annual General Meeting & World Air Transport Summit 2025, Delhi, India.

2-4 June (Monday-Wednesday): Propak MENA, Cairo, Egypt.

5-6 June (Thursday-Friday): Supply Chain & Logistics Innovation Summit, Amsterdam, Netherlands.

11-13 June (Wednesday-Friday): Sustainability World Summit, Frankfurt, Germany.

17-19 June (Tuesday-Thursday): Terminal Operations Conference & Exhibition, Rotterdam, Netherlands.

19 June (Thursday): East Med Maritime Conference, Athens, Greece.

25-26 June (Wednesday-Friday): Decarbonizing Shipping Forum, Hamburg, Germany.

JULY

1-3 July (Tuesday-Thursday): ASEAN Ports and Logistics, Jakarta, Indonesia.

SEPTEMBER

24-26 September (Wednesday-Friday): Routes World, Hong Kong.

OCTOBER

1-2 October (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam, Saudi Arabia.

14-15 October (Tuesday-Wednesday): Investing in Africa Conference and Expo, London, UK.

NOVEMBER

3-6 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi, UAE.

4-6 November (Tuesday-Thursday): Air Cargo Forum, Abu Dhabi, UAE.

17-21 November (Monday-Friday): Dubai Airshow, Dubai, UAE.

EVENTS WITH NO SET DATE

Mid-2025: Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

AD Ports-operated Safaga Port’s multi-purpose terminal will become operational.

Phase 3 of APM Terminals Tangier MedPort to be complete and operational.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

1Q 2025: Phase two of Jafza Logistics Park to be completed.

2026

2026 UNCTAD Global Supply Chains Forum, Saudi Arabia.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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