GIEWS Country Brief: Egypt 03-December-2018


Below average cereal harvest gathered in 2018

Slightly above average import requirements estimated for 2018/19 marketing year

Rising inflation rates due to increased energy and transportation costs

Below average cereal harvest gathered in 2018

The 2018 wheat and barley harvest was completed by early June. Maize and rice harvests, which started in early October, are about to be completed. The 2018 cereal production is forecast at 22 million tonnes, about 5 percent below the 2017 level and almost 10 percent below average.

Cereals are grown on irrigated fields, yielding relatively stable harvests. About 1.3 million hectares were planted with wheat in 2018, yielding 8.8 million tonnes, the same as in the previous year, but slightly below average due to reduced plantings compared to the average. In the 2018 wheat procurement season running from 15 April to 15 June, the General Authority for Supply Commodities (GASC) purchased 3.15 million tonnes of local wheat at USD 213-224 per tonne (EGP 570-600 per ardeb or 150 kg) based on quality and moisture levels. The purchased amount was about the same as in 2017, but 2 million tonnes below the 2016 levels.

While production of other cereals remained relatively stable in 2018, the rice harvest declined by over 20 percent compared to last year and the average, mostly due to a decline in the planted area from 850 000 hectares in 2017 to 762 000 hectares in 2018. High temperatures contributed to decreased yields. Further declines in rice planted area are projected in 2019 as farmers are expected to continue shifting to crops with more competitive Government procurement prices such as cotton and maize.

Winter wheat and barley, for harvest from May 2019, are currently being planted under favourable weather conditions.

Cereal import requirements forecast slightly above average

The country remains the world’s largest wheat importer. Wheat imports for the 2018/19 marketing year (July/June) are estimated at 12.5 million tonnes, about the same as the previous year and about 9 percent above the average for the last five years. Between June and November 2018, the country imported 5.3 million tonnes of wheat, about the same as in the same period a year ago. The three largest suppliers in the 2017/18 marketing year were the Russian Federation (5.2 million tonnes), Romania (1.1 million tonnes) and Ukraine (355 000 tonnes). As of October 2018, the country maintained wheat reserves sufficient to cover its needs for 4.3 months.

The overall cereal import requirements in the 2018/19 marketing year (July/June) are forecast at about 22.1 million tonnes, about the same as in the previous year and 10 percent higher than the five-year average.

Food inflation on the rise again

Following the sharp currency depreciation in November 2016, which pushed the annual food and beverage inflation rate gradually to almost 44 percent in April 2017, food inflation rested above 30 percent until November 2017, followed by a steady decline to about 10 percent between April and July 2018. Increased energy and transportation prices pushed food inflation up to 20 percent in October 2018.

Around 70 million of the country’s 92 million people benefit from a subsidy card programme which entitles them to EGP 21 (USD 1.16) worth of goods monthly in addition to five loaves of bread per day at a EGP 0.05 per loaf (USD 0.01) � less than one-tenth of the actual cost. Bakeries are subsidized for the difference in costs, currently about EGP 0.57. Under the current systems, beneficiaries can convert their unused bread quota into points to spend on 44 selected food products redeemable in State-owned shops or partnered private shops. For the 2018/19 fiscal year, the Government allocated EGP 86 billion (USD 4.8 billion) for bread and food subsidy schemes, up by EGP 1 billion compared to the 2017/18 allocation. About half earmarked for the bread subsidy programme.

Source: Food and Agriculture Organization of the United Nations