Egypt facing issue of food security in light of Ukraine crisis

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The Egyptian wheat market is struggling in the face of the Ukraine crisis, with the prices of wheat in the world's biggest importer rising after it tried to boost local production before realizing that its supplies could not meet public demand.

The repercussions of the crisis have extended to West Asia and North Africa, with the region importing much of its wheat from Ukraine and Russia. Egypt has started to feel the impact of the crisis, but it is not the first one, since Lebanon was the first to feel the heat of the issue, with Moscow and Kiev making up 65% of the country's wheat supplies.

Exponentially rising prices

With the Ukraine crisis closing in on a month since it started, bread prices have up, currently standing at 1.50 Egyptian pounds per loaf, as costs for wheat products have been skyrocketing, affected by the crisis in Europe and supply shortages. Experts are even warning that another increase was just around the corner.

A third of the Egyptian population lives below the poverty line, meaning that price hikes on a good as essential as bread would have grave repercussions on the country's working class. The International Monetary Fund had already advised Cairo to focus on its food security issues exacerbated by the fighting in Ukraine and the West's sanctions on Russia.

"We are importing some 80 percent of our wheat from Russia and Ukraine. The hostilities have already caused prices to spiral, and this means that the government will need to fork out an additional $9.5 billion for the same amount of wheat this fiscal year," a source within the Egyptian Ministry of Supply and Trade told Sputnik.

See more: The global wheat supply crisis

 

The Egyptian government might not be able to afford these additional costs, for the country has long been struggling to stabilize its economy, heavily hit by the COVID-19 pandemic due to its reliance on the tourism sector.

The Ukraine crisis also exacerbated the Egyptian issue of lack of tourism, disrupting the industry and prompting Cairo to want to put the situation under control.

IMF loan for more supplies

Cairo has reportedly been holding talks with the IMF to negotiate a loan to the struggling country, but even if the funds were to make it to Egypt, the disruption of wheat supplies still constitutes a serious issue for the country.

Moscow's special military operation in Ukraine has paralyzed Ukraine's ports, and Russia's wheat has also been struggling to make it into Egypt due to the heavy sanctions imposed on the country, prompting Cairo to focus on producing local wheat.

Not only did the government decide to increase national production, but it also banned the export of wheat-related products for the next three months.

Not enough wheat for the populace

Cairo is contemplating purchasing some six million metric tonnes (MMT) of Egyptian produce and expanding its storage areas to accommodate such vast supplies, though these figures are not nearly sufficient for Egypt's 100+ million people.

Official estimates suggest that the Egyptian people consume around 21 MMT of wheat per year, meaning that the issue would not be resolved by such an acquisition.

Russia's special military operation took place for several reasons, including NATO's eastward expansion. Other reasons were the Ukrainian shelling of Donbass and the killing of the people of the Donetsk People's Republic and Lugansk People's Republic, in addition to Moscow wanting to "denazify" and demilitarize Ukraine.

Following the operation, the US and its allies responded by rolling out comprehensive sanctions, including restrictions on the Russian central bank, export control measures, SWIFT cutoff for select banks, and closure of airspace to all Russian flights. Many of their companies have suspended their Russian operations.