Egypt well placed to withstand absence of Russian wheat supplies: trade

New Delhi — Egypt, the world's biggest wheat importer, is likely to be largely unaffected by the absence from the market of Russian wheat till June, as it has sufficient reserves and local wheat supplies, according to analysts and traders this week.

Russia, the world's largest wheat exporter, exhausted its grain export quota for April-June in April, a development some reports said could raise supply concerns. Russia is the mail supplier of wheat to Egypt.

"There is no negative impact for Egypt as it usually keeps enough wheat stock of 3-4 month's consumption," said Hesham Hassanein, Cairo-based senior consultant for Food and Agriculture Organisation of the United Nations.

Egypt also looks secured because it is currently in the wheat harvesting phase that started in April and the government plans to purchase around 3.6-4 million mt of local wheat till July, Hassanein said.

Russia had announced restriction of grain exports to 7 million mt for April-June as the world turned to ensuring food security in the wake of the coronavirus pandemic.

The grain export quota is completely used and the Federal Customs Service stopped issuing new export declarations, Russia's Agriculture Ministry said on Sunday.

Since the grain export quota was introduced, traders had rushed to book future shipments which led to the quota being exhausted in just a month from its application.

"[Russian] exporters have reserved the preliminary possibility of export, in most cases, without real contracts," said Elena Neroba, markets analyst with Maxigrains.

The exporters reserved quota on anticipated and estimated exports to Egypt's commodities procuring agency, Neroba said.

A Moscow-based private trader, Denis Kartashov, said there will be enough wheat with the importing countries till the new crop is harvested.

However, it is possible that buyers may wait until July when the new wheat crop from the entire northern hemisphere is available, Kartashov said. That is also the time when prices are low because of abundant supply.

Egypt has been adding strategic reserves of staples amid the coronavirus pandemic. In February through March, Egypt's General Authority for Supply Commodities, or GASC, bought around 720,000 mt through tenders.

Egypt's wheat imports are 60% through the state agency and the rest through private importers.

From July through February, GASC had imported 5.97 million mt of which 3.5 million mt was from Russia.

Egypt's wheat consumption in 2019-20 is estimated at 20.4 million mt, according to the US Department of Agriculture.