Egypt has signed a $500 million deal with the United Arab Emirates (UAE) to finance the nation’s wheat imports. The agreement is for five years. Al Dahra and Abu Dhabi Exports Office (ADEX) will be funding the nation’s imports. Egypt’s primary importers of wheat were Russia and Ukraine. The funding is meant to begin in January.
The deal
As part of this arrangement, the UAE has committed to providing financial support, which will enable Egypt to secure a consistent influx of wheat even in the face of potential supply disruptions. Disruptions and fluctuations in the value of the currency have been putting a strain on Egypt’s access to wheat.
“The new agreement reflects the depth of strategic relations between Egypt and the UAE and their keenness on enhancing economic integration and pushing forward joint development plans,” Minister of International Cooperation of Egypt, Rania Al-Mashat said. This collaboration underscores the shared commitment to maintaining a stable food supply chain, thus safeguarding the well-being of their populations.
Egypt
Just a couple of days ago, reports coming out of Egypt state of plans the nation has to plant 4 million acres of wheat in the coming season. This supports Egypt’s Vision 2030, which aims for self-sufficiency in wheat.
In April, Minister Mohamed Maait announced that the Egyptian Ministry of Finance has allocated 45 billion EGP this year for the purchase of local wheat from farmers. This represents a significant increase of over 19 billion EGP compared to the previous year. Starting from the beginning of April until mid-August, the government has been actively procuring local wheat.
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This surge in the wheat purchase price is aimed at bolstering farmer support and promoting the expansion of strategic crop cultivation, including wheat. This strategic approach is designed to contribute to achieving self-sufficiency in wheat production.
Globally
Nations across the world are navigating the landscape of grain exports and imports. Wheat prices in Pakistan have reached all-time highs recently. Just two days ago, reports released recorded a 132 percent increase in cost.
Following the annulment of the Black Sea Grain Initiative on the Safe Transportation of Grain and Foodstuffs from Ukrainian ports, Russia, Turkey, and Qatar are in the preliminary stages of planning a new grain export deal. This prospective collaboration holds the potential to reshape the market. Talks are leading towards Russia primarily supplying its grain to African nations, with Qatar sponsoring the supplies, and Türkiye taking responsibility for coordinating the deal, the report further stated.
Over the past year, Ukraine has been able to export more than 32 million tonnes of grain and other food products. This is vital, as countries in the Middle East and North Africa (MENA) region heavily depend on Ukrainian imports. Both Ukraine and Russia play substantial roles in the global food supply chain. Together, they contribute 29 percent of wheat exports and 80 percent of sunflower exports worldwide.
Ukraine, often hailed as a global breadbasket, stands as a primary grain provider to numerous developing nations. In 2021, the nation’s grain exports amounted to a substantial $12.2 billion, constituting nearly one-fifth of its total exports.
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