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The Ukrainian-Russian crisis.. How did Egypt prepare to secure wheat?

While observers have warned that the Ukrainian crisis will lead to a rise in global wheat prices, Egypt, which is the “largest importer of wheat in the world”, is moving through a number of ways and preventive measures to secure wheat supplies, in the event that imports from Russia and Ukraine (the largest wheat exporters to Cairo) are affected. If war breaks out.

In separate interviews with “Sky News Arabia”, experts played down the fears of the impact of the Ukrainian crisis on wheat supplies to Egypt at the present time, and said that “the strategic reserves of wheat are within the safe limits.”

Russia has massed more than 100,000 troops near the Ukrainian border in recent weeks, according to US estimates, raising concerns among Western and Ukrainian intelligence officials that an invasion may be imminent.

The Egyptian Minister of Supply, Ali Al-Moselhi, stated, the day before yesterday, that “the existence of skirmishes between the largest exporters of wheat and grain in the world raises a state of uncertainty in the market,” according to statements carried by the Middle East News Agency.

Al-Moselhi stressed that “the strategic reserve of wheat is safe and sufficient for a period of 5.4 months.”

He added that the ministry took precautionary measures to secure its stocks of wheat, as it worked to diversify its import sources, such as the United States, France, Russia, Romania and Ukraine.

He noted that “studies regarding hedging against the fluctuations of wheat markets are still ongoing,” pointing out that “a committee has been formed in the Ministry of Finance to study hedging policies, and discussions will be completed at the beginning of next month so that the feasibility of this procedure will be discussed or not.”

Medium and long term preparations

Medhat Nafeh, an economist and former head of the Mineral Holding Company, reviewed in an exclusive interview with “Sky News Arabia”, the preventive measures taken by the Egyptian government, explaining, “Egypt has in the short and long term a strategic reserve for consumption that is sufficient for more than 5.2 months, and it is an important reserve. Too much for the wheat supply for a population of over 100 million.”

He added: “To secure wheat supplies in the medium term, the diversification of import sources, whether from France or others, is promoted, without relying on only one source, in addition to working to expand the use of future contracts to purchase wheat or other supply commodities, similar to what is happening for raw materials. petroleum”.

At the end of last December, the General Authority for Supply Commodities, on behalf of the Ministry of Supply and Internal Trade, contracted through an international tender to purchase 300,000 tons of French, Ukrainian and Romanian wheat as part of the ministry’s strategy to enhance its stocks of basic commodities, according to the official Middle East News Agency.

In a previous statement, the authority indicated that 60,000 tons of French wheat, 180,000 tons of Ukrainian wheat and 60,000 tons of Romanian wheat were purchased for shipment from February 15 to March 3.

In the long term, according to Nafeh, work will be done on local agriculture and increasing the cultivated area of ​​wheat, as this requires great preparations and many controls.

An official at the Egyptian Ministry of Agriculture told Reuters news agency recently that Egypt planted 3.62 million acres of wheat, the largest ever, in the current 2022 season.

He stressed that “there will not be an impact of the crisis in particular on Egypt, because it will be affected as will the countries of the world,” noting that “the peculiarity of Egypt is that Ukrainian wheat is the main source of wheat supplies to it, as it represented about 14% in 2020; being the best in price. and quality”.

The privacy of the Egyptian case

In turn, Wagdy Al-Mashad, Vice President of the Chamber of Grain Industry in the Federation of Egyptian Industries, said in an exclusive interview with “Sky News Arabia”, that “there is no effect at the present time for the Ukrainian-Russian crisis, as we have a stockpile of the required wheat shipments and the stock is sufficiently sufficient for 6 months.” “Relying heavily on wheat imports from Ukraine and Russia,” he said.

He continues: “Our government has succeeded in maintaining levels of strategic stocks in all basic commodities, as the lowest stock in the country of commodities is at least 3 months, a period considered in the life of many countries, while during the era of the Brotherhood’s rule, we did not have a stock of commodities. Sufficient for 12 days.

He also noted that “there is a crisis that occurs sometimes and not always, related to oils as a vital and necessary commodity, and there is a tendency to increase the balance of the strategic stock of oil… and the current stock is sufficient.”

Ukraine tops the list of the world’s largest exporters of sunflower oil, and Egypt ranks fourth in terms of import.

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