The Egyptian government is racing against time to secure its wheat needs for the production of subsidized bread, by starting the harvest season and supplying local wheat to its granaries and warehouses 15 days earlier than the usual date, in mid-April, after the reserves fell to an alarming level.

A few days ago, Cabinet spokesman Nader Saad said - in a statement - that the country's strategic reserve of wheat is sufficient for only 2.6 months instead of 4 months in early March, as a result of the turmoil in global wheat markets due to the Russian war on Ukraine on the one hand, and the cancellation of tenders. International purchase of wheat due to the high prices on the other hand.

The harvest season, which started early this year, halted international tenders for the purchase of wheat, which, according to observers, contributes to calming the volume of demand for wheat globally, and consequently the decline in prices, which reached an unprecedented level, and according to the economic website Enterprise, this halt will extend Until mid-May at least.

The local harvest season this year changed every year, as the government viewed it as the savior and savior for it from the crisis of shortage of wheat supplies, one of the most important strategic commodities to secure daily bread for about 71 million citizens who benefit from bread subsidies with ration cards.

Local wheat is the government's haven

The government has shifted its focus towards local wheat, which is one of the finest types of wheat in the world, and doubled the budget for wheat supply to its granaries and warehouses compared to last year, and announced that it aims to spend about 36 billion pounds (about two billion dollars) to purchase 6 million tons of local wheat this year instead of About 3.5 million tons last year.

The government set the purchase price of an ardeb of wheat between 865 and 885 pounds only, an increase of 65 pounds over the price announced before the global wheat crisis as an incentive for the farmer. Of the world price by more than a third, despite farmers' demands to supply a ton of wheat at a price of at least one thousand pounds.

Although the Egyptian government has devalued the pound by about 17% against the dollar in the past few days, which means an increase in the price of a ton of imported wheat by the same rate, it has ignored this matter, and the announced price has remained the same until now without any increase, which angered some farmers.

In order to ensure the supply of wheat to its granaries, the government obligated farmers to supply the crop to it and not to dispose of any quantities without a permit, and approved several measures such as allocating a minimum sale, prohibiting selling to third parties without a license, and vowing not to disburse subsidized fertilizer for the summer planting season to those who supply less of at least 60% of his crop, and imprisonment from one to five years for violators.

Despite ignoring the demands to increase the price of supplying ardeb to the fair price, which is the international price, Ministry of Agriculture spokesman Muhammad Al-Qarsh says, "The Ministry of Agriculture is keen to support wheat farmers in a large way during the recent period," noting that "the state is spending billions of pounds in subsidizing the wheat file." .

With the aim of accelerating the pace of wheat collection and securing empty silos, Al-Qarsh explained in televised statements that the wheat supply season began this year 15 days earlier than the normal date, in addition to increasing the wheat collection points from farmers by more than 400 points.

In an attempt to control the markets, the government sets the selling price of a loaf of free bread until further notice and a penalty of up to 5 million pounds for violating outlets pic.twitter.com/CDBR8A60Uo

— Al Jazeera Egypt (@AJA_Egypt) March 21, 2022

Increase support and price for the farmer

The government buys from farmers about 3.5 million tons of local wheat each year, according to Abdel Tawab Barakat, an advisor to the former Minister of Supply, covering 5 months for the production of subsidized bread, and imports about 5.1 million tons of foreign wheat, to cover the rest of the year, which is 7 months.

Barakat added - to Al Jazeera Net - that the private sector buys about 8 million tons of external wheat needed for the manufacture of tourist bread, fino, pasta and sweets, and therefore Egypt imports 13.1 million tons of global wheat, because local production is sufficient for only 40% of domestic consumption.

The agricultural economist explained that local production does not cover more than 5 months only of the year, as a result of neglecting wheat cultivation and subsidizing the farmer, and if the government does not raise the price of supplying local wheat to the equivalent of the price of imported wheat, which is 1200 pounds per ardeb, the government will not be able to purchase the amount it targets from Local wheat, which is 6 million tons.

The wheat import bill amounts to about $3 billion annually before increasing it by more than a third due to the Russian-Ukrainian war. Egypt imports about 12 million tons annually (governmental and private), and consumes about 20 million tons of wheat annually, including about 9 million tons for subsidized bread production. Which is spent on ration cards to produce nearly 270 million loaves per day.

Russia and Ukraine together provide nearly a third of the world's wheat supplies. About 50% of Egypt's wheat imports came from Russia last year, and about 30% of them came from Ukraine, or about 80% of Egypt's total wheat imports.

The total cultivated area of ​​the wheat crop at the level of the Republic is about 3 million and 659 thousand feddans, and the total productivity of the crop this season is expected to reach about 10 million tons, according to the Ministry of Agriculture.

Expectations of the US Department of Agriculture indicate an increase in Egypt’s wheat production in the new season by 8.9%, supported by the increase in the cultivated area, noting that it will produce 10.8 million tons of wheat in the 2022/2023 season. The report also expected that Egypt’s wheat imports would decline by 5.1% to 10.1 million tons.

The private sector imports 60% of wheat imports, while the state imports 40% of these imports, amid expectations that wheat consumption will decline by 2.6% to 21 million tons in the new season, according to the report.

Egypt began harvesting wheat two weeks ahead of schedule to avoid running out of stocks (Al-Jazeera)

wheat harvest

As far as the eye can see, wheat fields extend in one of the cities of the Sharkia Governorate, its yellow ears blending like gold with the sun's rays and vibrating with the spring air.

The children of Al-Hajj Yusri, who own about 50 acres, say that "this year's harvest should yield a bountiful return for farmers in light of the increase in global prices and the increase in demand for wheat, but the government wants to take it at less than fair prices."

And they indicated - in their talk to Al Jazeera Net - that they want to sell the largest amount to the merchants who offered prices higher than the government price, but the representatives of the Ministries of Supply and Agriculture are on the lookout for every quantity that goes out to other than their warehouses and silos.

How will the government store 6 million tons?

But what about the storage capacity available for this large amount of local wheat? Does the country have the ability to store 6 million tons in addition to the already existing imported quantities?

According to a press statement by Hussein Abu al-Dahab, a member of the Grain Industry Division, "the government usually reduces its wheat imports during the harvest season to make room for local supplies, and then resumes the import cycle again once local wheat reserves decrease."

However, with the quantities doubled this season, they seem larger than the available storage spaces, despite the success of the national project to construct modern silos in increasing the storage capacity from 1.2 million tons of wheat in 2014 to 3.4 million tons in 2021, and increasing it to nearly 3.6 million tons this year with the new increase.

Thus, the government will move to renting silos from the private sector, which will allow to increase the storage capacity and store 6 million tons, in addition to the use of shawn and hangars.