Egypt, the world’s largest wheat customer, increased its purchases by nearly 40 cents from year to year in the first two months of its shopping season, with its Ministry of Supply still guilty of holding six months of strategic reserves in reaction to COVID -19.
Between July and August, Egypt bought 2. 4 million tonnes of wheat from foreign suppliers, up from 1. 72 million tonnes purchased at the same time last year.
“Following the orders of political leaders, we maintain a strategic reserve of no less than six months of goods,” the ministry said in a written reaction to Reuters’ questions about increased purchases.
“This has had a significant effect in recent months on obtaining stocks of products as a preventive measure in the face of the COVID-19 crisis that has spread around the world. “
Egyptian President Abdel Fattah al-Sisi first called on the government to establish strategic reserves in March, as global food security disorders increased and source chains were disrupted when closures were imposed to involve the pandemic.
The Egyptian state’s grain buyer, the General Commodity Supply Authority (GASC), has tendered for wheat almost every week for the next two months.
“International costs have been rising since mid-August and I think Egypt has made the decision to make seasonal purchases before buying silos before costs rise further,” said one European merchant.
About 85. 4% of wheat purchased through gasc from July to August 2020 in Russia, according to Reuters calculations based on industry data.
Russia, one of the world’s largest wheat exporters, said it could impose a grain export quota in the first part of 2021, a mechanism tested in the last quarter of 2020 in reaction to COVID-19, if required to secure domestic supplies. .
Russia, which had said in the past would do so with the January-June quota in October, is not rushing to take a resolution because the 2020 harvest is important, two resources of Russian industry said.
Asked whether these were forward-looking quotas, the Ministry of Supply stated that it still had choice scenarios when creating its import plan, “to address all global cases or adjustments in the global market. “
“Egypt can buy and buy a lot of wheat from Russia. The challenge is that other loader countries are also buying from Russia due to export relief from France, Ukraine and Romania,” one trader said.