Ukraine crisis throws Egypt's wheat purchases into doubt, hits tourism

Record ID: 1662095

  • Title: Ukraine crisis throws Egypt's wheat purchases into doubt, hits tourism
  • Date: 3rd March 2022
  • Summary: DUBAI, UAE (MARCH 1, 2022) (REUTERS) (SOUNDBITE) (Arabic) RESEARCH FELLOW AT ECONOMIC RESEARCH FORUM, AHMED SHOUKRY RASHAD, SAYING: "We need to diversify the countries from which we import wheat. Definitely, we will resort to more expensive countries that export wheat, which would sell to us at prices that are not as cheap in Russia and Ukraine, like France, Germany or oth
  • Embargoed: 17th March 2022 19:06
  • Keywords: Egypt Russia Ukraine crisis economy tourism wheat
  • Location: QALYOUBIYA, KAFR ZIADA, HURGHADA, AND CAIRO, EGYPT / DUBAI, UAE
  • City: QALYOUBIYA, KAFR ZIADA, HURGHADA, AND CAIRO, EGYPT / DUBAI, UAE
  • Country: Egypt
  • Topics: Conflicts/War/Peace,Middle East
  • Reuters ID: LVA006161902032022RP1
  • Aspect Ratio: 16:9
  • Story Text:Russia's invasion of Ukraine has left Egypt's wheat import prospects in turmoil and its tourism industry hit.
    Two cargoes of wheat purchased by Egypt's state buyer are stuck at Ukrainian ports, other deliveries are at risk and now prices are soaring, traders say.
    However, Egypt's reserves mean it is not in a rush to buy as it assesses prices of the grain from outside Ukraine and Russia, the deputy supply minister said in an interview.
    Egypt is often the world's top importer of wheat. Last year, some 50% and 30% of state and private sector imports came from Russia and Ukraine respectively, according to traders.
    Purchases by Egypt's state buyer, the General Authority for Supply Commodities (GASC), go towards heavily subsidised bread available to more than 60 million Egyptians. The government says it intends to reform the programme as it tries to limit its import bill, but has yet to announce a plan.
    GASC has cancelled two tenders since Russia's invasion. It cancelled the first because of a lack of bids, was "testing the water" to assess prices with the second, and was in no rush to buy, Ibrahim Ashmawy, deputy supply and internal trade minister, told Reuters.
    For future imports this year, "we will look into EU because of proximity but we will not exclude other exporters like the U.S., Kazakhstan, Romania," he said.
    However, he said Egypt was confident in existing reserves and in the quantity of wheat that would become available from the local harvest, which could suffice for nine months.
    Since the invasion, one cargo of Ukrainian wheat purchased by GASC for Feb. 15-March 3 shipment was able to leave port but two other cargoes totalling 120,000 tonnes and purchased in December are stuck in port, according to Egypt's Transport Ministry data.
    GASC has purchased another 300,000 tonnes of Ukrainian and Russian wheat as well as 120,000 tonnes of Romanian wheat for shipment in March. A further 180,000 tonnes of Romanian wheat is booked for April.
    GASC has agreed to extend the shipment deadline for at least one cargo stuck in Ukraine, and has said it would be flexible over documentation provided by suppliers, one trader said.
    The tourism sector is also feeling the impact of the Ukraine crisis. Currently there are 20,000 Ukrainian tourists stranded at Egyptian resorts.
    In the Red Sea resort of Hurghada, hotel group manager Mohamed Wafa said Russian and Ukrainian clients were very important for tourism businesses in Egypt.
    "They represent a major part of the tourism flow to Egypt, and they are both indispensable," he added.
    (Production Mohamed Abdel Ghany, Sayed Sheasha, Mai Shams El-Din)
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