7 Reasons Why Egypt is the Largest Wheat Importer in the World

Egypt is the world’s largest wheat importer, spending more than $4 billion annually to feed its population of over 100 million people. Wheat is a staple food in Egypt, used to make bread, pasta, pastries and other products. But why does Egypt import so much wheat, and where does it come from? Here are seven reasons why Egypt is the largest wheat importer in the world.

1. High domestic consumption

Egypt has one of the highest per capita consumption rates of wheat in the world, estimated at about 180 kilograms per year. This is partly due to the government’s policy of subsidizing bread for the poor, which accounts for about 40% of the total wheat consumption. Bread is considered a basic right in Egypt, and any attempt to raise its price or reduce its quality can spark social unrest.

2. Low domestic production

Egypt’s domestic production of wheat is not enough to meet its demand, due to limited arable land, water scarcity, low yields and climate change. Egypt produces about 8.5 million tons of wheat per year, while it consumes about 20 million tons. This means that it has to import about 11.5 million tons of wheat annually, or more than half of its needs.

3. High quality standards

Egypt has strict quality standards for the wheat it imports, requiring high protein content, low moisture content and low levels of pests and diseases. These standards are meant to ensure the quality and safety of the bread and other products made from wheat. However, they also limit the number of countries that can supply wheat to Egypt, as not all wheat varieties meet these criteria.

4. Diversified sources

Egypt imports wheat from a variety of sources, mainly from Russia, Ukraine, Romania, France, the United States and Canada. Egypt tries to diversify its sources of wheat to avoid dependence on one or a few suppliers, and to take advantage of price fluctuations and market opportunities. However, some sources are more reliable and cheaper than others, and Egypt often prefers to buy wheat from Russia and Ukraine, which together cover more than 70% of its imported wheat demand.

5. Strategic reserves

Egypt maintains a strategic reserve of wheat, estimated at about 3 million tons, to ensure food security and stability in case of any disruptions in supply or demand. The strategic reserve is stored in silos across the country, and is replenished regularly by importing wheat throughout the year. The reserve also allows Egypt to intervene in the market and regulate the price and availability of bread and other products.

6. Trade agreements

Egypt has several trade agreements with other countries that facilitate its wheat imports, such as the Common Market for Eastern and Southern Africa (COMESA), the European Union (EU), the United States and Canada. These agreements provide preferential tariffs, quotas or exemptions for Egyptian wheat imports, reducing the cost and increasing the competitiveness of Egyptian products.

7. Future plans

Egypt has plans to increase its domestic production and reduce its reliance on wheat imports in the future, by expanding its cultivated area, improving its irrigation systems, introducing new varieties and technologies, and enhancing its research and extension services. However, these plans face many challenges and uncertainties, such as land degradation, water scarcity, climate change, population growth and political instability.

The Global Wheat Market: Trends and Challenges

Wheat is one of the most important staple crops in the world, providing food and feed for billions of people and animals. According to the Food and Agriculture Organization (FAO), global wheat production reached 776 million tonnes in 2021, an increase of 1.7% from the previous year. However, wheat consumption also grew by 2.2%, exceeding production and leading to a decline in stocks. This situation poses challenges for the wheat market, especially for the major importers and exporters of this commodity.

Who are the largest wheat importers in the world?

According to the World’s Top Exports website, the top five wheat importers in 2022 were Indonesia, Egypt, China, Turkey and Italy, accounting for 24.3% of the total wheat imports in value terms. These countries have different drivers and patterns of wheat demand, depending on their population size, income level, dietary preferences, domestic production and trade policies.

Indonesia

Indonesia is the largest wheat importer in Southeast Asia, with a growing demand for wheat-based products such as noodles, bread and cakes. Indonesia imported 11 million tonnes of wheat in 2022, mainly from Australia, Canada, Argentina and India. Indonesia has a self-sufficiency policy for rice, its main staple crop, but relies on imports to meet its wheat needs.

Egypt

Egypt is the largest wheat importer in Africa and the Middle East, with a per capita consumption of about 180 kg per year. Wheat is essential for making subsidized bread, which is a staple food for most Egyptians. Egypt imported 12 million tonnes of wheat in 2022, mostly from Russia and Ukraine, which together supplied more than 70% of its wheat imports. Egypt faces challenges such as population growth, water scarcity, climate change and currency devaluation that affect its wheat security.

China

China is the largest wheat producer and consumer in the world, but also a net importer of wheat since 2010. China imported 12 million tonnes of wheat in 2022, mainly from Australia, Canada, France and Kazakhstan. China’s wheat demand is driven by its large population, rising income, urbanization and diversification of diets. China also imports wheat to replenish its strategic reserves and to comply with its commitments under the Phase One trade deal with the US.

Turkey

Turkey is a major wheat producer and exporter in the region, but also imports wheat to meet its domestic demand and to re-export flour and pasta to other countries. Turkey imported 10 million tonnes of wheat in 2022, mostly from Russia, Ukraine, Romania and Kazakhstan. Turkey’s wheat demand is influenced by its population growth, food subsidies, exchange rate fluctuations and geopolitical tensions.

Italy

Italy is the largest wheat importer in the European Union (EU), with a high demand for durum wheat, which is used to make pasta. Italy imported 2.8 million tonnes of wheat in 2022, mainly from Canada, France, Romania and Ukraine. Italy’s wheat demand is affected by its consumption patterns, quality standards, domestic production and trade policies within the EU.

How does global demand affect the wheat industry?

The global demand for wheat has been increasing over the years, driven by population growth, income growth, urbanization and dietary changes in developing countries. According to the FAO, global wheat consumption is projected to reach 800 million tonnes by 2030. This implies that more wheat will be needed to feed the world, which will have implications for the wheat industry.

One implication is that more land and water will be required to grow more wheat, which may pose environmental challenges such as land degradation, water scarcity and greenhouse gas emissions. Another implication is that more investment and innovation will be needed to improve wheat productivity and quality, which may entail higher costs and risks for farmers and consumers. A third implication is that more trade and cooperation will be needed to ensure food security and stability in the wheat market, which may involve political and economic challenges such as trade barriers, price volatility and conflicts.

References:

https://www.llv.li/files/as/liechtenstein_in_figures_2020.pdf

https://tcdata360.worldbank.org/countries/KSV?indicator=1541&countries=BRA&viz=line_chart&years=1970,2019&country=KSV

http://www.fao.org/economic/est/publications/wheat-market-monitor/en/
https://www.ers.usda.gov/publications/pub-details/?pubid=101297
https://www.igc.int/en/grainsreport/default.aspx
https://www.worldbank.org/en/research/commodity-markets

https://www.aljazeera.com/news/2022/2/17/infographic-russia-ukraine-and-the-global-wheat-supply-interactive
http://www.fao.org/3/ca9692en/ca9692en.pdf

https://oec.world/en/profile/bilateral-product/wheat/reporter/egy

https://www.aljazeera.com/news/2022/2/17/infographic-russia-ukraine-and-the-global-wheat-supply-interactive