Wheat prices are rising to the highest levels in years.. what about the Arab countries?
The price of wheat rose to a record high in Paris, as buyers gather European supplies, on the back of shortages elsewhere, causing fears of more food inflation, Bloomberg News reported on Tuesday. .
Wheat from the European Union has become increasingly vital this year, after poor harvests at other major suppliers, while export taxes slashed sales from wheat giant Russia.
The European bloc is preparing to regain its position as the world’s largest exporter of wheat, although it may be difficult to maintain the pace of sales once upcoming crops in some countries replenish supplies.
Wheat is a vital staple in the world, and Europe is a major supplier of it to parts of Africa and the Middle East, where governments are already considering raising the costs of subsidized bread, German news agency DPA reported.
Record levels for US wheat prices
And yesterday, Monday, US wheat futures prices rose to their highest levels in 8 and a half years, supported by strong demand on the back of tight global supplies.
The rise in wheat prices came after a wave of deals in the export market, most notably a huge deal of 1.3 million tons bought by Saudi Arabia.
Analysts said the wheat market is rising to new levels amid strong global demand. Prices on the Chicago Mercantile Exchange recorded their highest level since January 2013, while prices on the Paris Euronext Stock Exchange rose to their highest level in 13 and a half years.
A poor spring wheat harvest and export duties imposed by Russia have boosted expectations of a relatively tight supply this season.
Russian wheat prices rise
Analysts reported that Russian wheat export prices continued to rise last week, amid an increase in wheat prices in Chicago and Paris and demand from Egypt, the world’s largest wheat importer.
Wheat export prices in Russia – the world’s largest exporter – have been rising for 4 months on a weekly basis, with the exception of one week last October, when the increase stopped for a short period.
Consulting firm AKAR said that Russian wheat with a protein content of 12.5 percent, which was carried from the Black Sea ports for supply in the first half of November, amounted to $317 per ton on a FOB basis at the end of last week. An increase of $5 over the previous week.
The company added that the import prices for the second half of November amounted to 324 dollars.
Russian wheat exports have fallen 31.5 percent since the start of the 2021-2022 marketing season on July 1, due, among others, to a government tax on exports that will continue to rise next week and will reach $69.9 per ton.
What about the Arab markets?
The General Authority for Supply Commodities, the state buyer of grain in Egypt, said on Monday it had bought 180,000 tons of Russian wheat in an international tender for shipment from December 11-20.
The authority stated – in a statement – that this comes within the framework of the Ministry of Supply’s strategy to enhance its stocks of basic commodities.
In its previous tender on October 27, the authority purchased 360,000 tons of wheat, including 180,000 tons of Russian wheat, 120,000 tons of Ukrainian wheat, and 60,000 tons of Romanian wheat. Egypt is the largest buyer of wheat in the world.
Egypt imports about 12 million tons annually (governmental and private), and consumes about 20 million tons of wheat annually; Including about 9 million tons of subsidized bread, which is spent on ration cards, to produce nearly 270 million loaves per day.
For its part, the General Organization for Grains in Saudi Arabia completed the procedures for awarding the sixth batch of imported wheat for this year, amounting to one million and 268 thousand tons, from the origins of the European Union, the Black Sea, Australia, and the South and North Americas.
Purity Saudi Press Agency (SPA) The Governor of the Corporation, Engineer Ahmed bin Abdulaziz Al-Faris, said – in a statement yesterday, Monday – that the contract for this batch comes within the framework of meeting the needs of wheat milling companies and maintaining the strategic stock at safe levels.
He pointed out that it will be the sixth contracted batch this year during the period from next January and April by 20 ships.
By awarding the sixth batch for this year, the Corporation has contracted since the beginning of this year for an estimated quantity of about 3.4 million tons of imported wheat, while about 576,000 tons of local wheat were purchased from farmers this season, bringing the Corporation’s purchases of wheat this year to about 4 million tons. , according to the same source.
The record rise in wheat prices will negatively affect the bread sector in many Arab countries.
There are 9 Arab countries that account for 22.9% of global imports. The list of the largest importers includes: Egypt, Algeria, Morocco, Iraq, Yemen, Saudi Arabia, Sudan and the UAE, in addition to Tunisia. The volume of imports from these countries exceeds 40 million tons annually.