Mainly private buyers import wheat to Egypt after change in government procurement policy

After changes in the state wheat procurement agency in Egypt, private companies began to dominate among importers.

According to the US Food and Agriculture Organization, Egypt will purchase 12.5 million tons of wheat in 2024/25. Traditionally, imports have been handled by the public and private sectors. In 2023/24, the state agency GASC provided 52% of the total imports of 12.3 million tons, and in 2024/25, 3.17 million tons of wheat were contracted through tenders and private agreements.

However, on December 6, the Ministry of Supply transferred the authority of GASC to the new Mostakbal Misr agency, which in January increased the private sector's share of imports compared to the previous year, as the agency purchased wheat mainly from local companies.

According to traders, since December, Egypt has purchased about 1 million tons of wheat from local farmers and its private companies with stocks of Russian wheat. However, there is information that Egyptian farmers are limited in sales to the state, while sales to private companies are undesirable. Currently, private companies are offering imported wheat at a price 10-15 $ / ton lower than current import prices.

In January, wheat imports reached 650,812 thousand tons, of which 90% were supplied by private importers, and only 63 thousand tons by state-owned companies, while in January 2024, Egypt purchased 688,394 thousand tons of wheat, of which 84% through state agencies.

Private importers have already established ties with international importers, allowing Mostakbal Misr to purchase Russian wheat on the local market, although this could lead to a gap in supplies.

If the state does not import the amount of wheat needed to meet overall demand, and private importers increase purchases, this could lead to potential shortages and price spikes.

The last spot offer for wheat with 12.5% protein CIF - port of Alexandria had a price of $255/t, freight from the Russian Federation to Egypt - $15/t, therefore S&P Global Commodity Insights estimated the price of Russian wheat with 12.5% for loading in March at $242/t FOB.

Russian wheat continues to dominate the Egyptian market. In the 2023/24 MY, its imports reached 5.3 million tons. In January, the share of wheat from the Russian Federation increased by 1.1% compared to last year to 85.5%. In the near future, another 291.2 thousand tons of wheat will be shipped from Novorossiysk to Egypt.

At the same time, Egypt supplies at least 1 million tons of flour to neighboring countries, including Sudan and Palestine, annually, ensuring the region's food security in the face of protracted conflicts. And the Mostakbal Misr agency, established in 2022 by presidential decree, acts as a development unit of the Egyptian Armed Forces.