CAIRO (Archyde.com) – In a silo complex in the Egyptian Nile Delta city of Benha, Ahmed Nasser watches truck following truck unload freshly harvested wheat.
With the absence of most of the wheat from the Black Sea as a result of the Russian attack on Ukraine, Egypt – the second largest wheat importer in the world – is doing its best to obtain all it can gather from the local crop, which is in its peak now.
The government provides heavily subsidized bread to more than 70 million people, and has set an ambitious target of buying six million tons of local wheat, more than two-thirds of what it has been buying in any of the past two years. Egypt has a population of regarding 103 million.
Silo workers like Nasser work overtime.
good yield
After a slow start, farmers and officials say the harvest is good, but both farmers and the government still face great pressure.
The food support program in Egypt requires the availability of regarding nine million tons of wheat annually. Last year, the government imported 4.7 million tons, mostly from Russia and Ukraine, and bought regarding 1.9 million tons from abroad for shipment in 2022. About 300,000 tons are stuck in Ukraine, while uncertainty overshadows future prices and supplies.
As the government seeks to boost wheat reserves, it says farmers must supply the state with at least 60 percent of their crop, up from 40 percent last year.
The rules are intended to prevent farmers from withholding more of their crops for animal feed and to prevent traders from selling wheat on the open market.
On the other hand, the government raised its purchase price of wheat by 22% compared to last year, to between 311.23 and 318.40 dollars per ton, although this is still much lower than prices in international markets, and some farmers say that this increase is not enough.
In Banha, north of Cairo, farmer Ahmed Samir, 59, said that this year he planted less wheat on his three-acre land due to higher labor prices and other costs.
He plans to sell regarding two-thirds of his wheat to the government and keep the rest for private consumption.
Guaranteed return
Farmers see advantages in selling to the government, including obtaining a guaranteed return for those who are in debt or need urgent money. As of Thursday, the government had bought 3 million tons of the local crop in the harvest season, which runs until July.
Perhaps the biggest challenge for the government is trading with a third party, which it is trying to restrict by requiring farmers to obtain permission to sell wheat in the market following fulfilling their quotas.
International wheat prices, which are usually lower than Egyptian wheat prices, rose to regarding $450 per ton in the latest tender that Egypt put out in April, prompting traders to buy local wheat.
Two private sector traders said that some private mills offer 7,000 Egyptian pounds ($377) per ton of local wheat, regarding 1,100 Egyptian pounds ($59) more than the government offers, but this remains much lower than the international price.
high costs
In recent weeks, there were frequent reports of the government confiscating hundreds of tons of wheat illegally traded by private mills.
And farmers’ suffering from high costs, including fertilizer and labor costs, raise questions regarding an old effort to use arable land and scarce water to expand the area of land planted with wheat and promote self-sufficiency.
Hamada, a 45-year-old farmer from Minya governorate, 220 km south of Cairo, says he has planted more wheat this year, encouraged by the higher purchase price. But he soon realized that it came at a cost.