5 Reasons Why Egypt is the World’s Biggest Importer of Wheat

Wheat is one of the most important staple crops in the world, especially in developing countries where it provides a significant source of calories and protein. Wheat is also a versatile crop that can be used for making bread, pasta, noodles, cakes, biscuits, and many other products. However, not all countries are able to produce enough wheat to meet their domestic demand, and some have to rely on imports from other countries. One such country is Egypt, which is the world’s biggest importer of wheat. According to the USDA, Egypt imported 12.5 million metric tons of wheat in 2022/23, followed by China with 11 million metric tons. In this article, we will explore some of the reasons why Egypt is the world’s biggest importer of wheat.

1. High population growth and consumption

Egypt has a population of over 100 million people, making it the third most populous country in Africa and the 14th most populous country in the world. Egypt’s population has been growing rapidly in recent decades, increasing by more than 50% since 1990. This means that Egypt has to feed more mouths every year, and wheat is one of the main foods that Egyptians consume. According to the FAO, Egypt’s per capita wheat consumption was 184 kilograms in 2019, which is the highest in the world and more than double the global average of 67 kilograms. Egyptians consume wheat mainly in the form of bread, which is a staple food that is eaten with almost every meal. Bread is also heavily subsidized by the government, making it affordable for low-income households.

2. Low domestic production and productivity

Egypt produces some wheat domestically, but not enough to meet its demand. According to the USDA, Egypt’s wheat production was 8.7 million metric tons in 2022/23, which only covered about 41% of its consumption. Egypt’s wheat production has been stagnant or declining in recent years, mainly due to limited arable land, water scarcity, climate change, pests and diseases, and low yields. Egypt has only about 3.6 million hectares of arable land, which is less than 4% of its total land area. Most of this land is located along the Nile River and its delta, where irrigation water is available. However, Egypt faces severe water stress due to its dependence on the Nile, which is shared by 10 other countries upstream. Egypt’s water availability per capita is expected to drop by more than 50% by 2030 due to population growth and climate change. Moreover, Egypt’s wheat yields are low compared to other major wheat producers. According to the FAO, Egypt’s wheat yield was 2.4 tons per hectare in 2019, which is less than half of the global average of 5.5 tons per hectare. This is partly due to the use of outdated varieties, poor agronomic practices, inadequate inputs, and weak extension services.

3. High dependence on international markets and price volatility

Egypt imports most of its wheat from international markets, mainly from Russia, Ukraine, Romania, France, and the United States. This makes Egypt vulnerable to fluctuations in global wheat prices and supply shocks. For example, in 2010-2011, Egypt faced a severe wheat crisis when Russia imposed a ban on wheat exports due to a drought that reduced its harvest by more than 30%. This caused global wheat prices to spike by more than 70% in six months, forcing Egypt to pay higher prices for its imports and increasing its food import bill by more than 50%. This also triggered social unrest and political instability in Egypt, as millions of people protested against rising food prices and demanded regime change. Similarly, in 2020-2021, Egypt faced another wheat crisis when Russia imposed an export tax on wheat exports to curb domestic inflation. This caused global wheat prices to rise by more than 30% in six months, again putting pressure on Egypt’s budget and food security.

4. Low diversification of food basket and dietary patterns

Egypt’s food basket and dietary patterns are highly dependent on wheat and bread, which account for about 40% of the total caloric intake and 60% of the total carbohydrate intake of Egyptians. This means that any change in wheat availability or price can have a significant impact on food security and nutrition in Egypt. Moreover, this high dependence on wheat and bread limits the consumption of other nutritious foods such as fruits, vegetables, legumes, dairy, and meat, which are essential for a balanced and healthy diet. According to the FAO, Egypt’s per capita consumption of fruits and vegetables was 149 kilograms in 2019, which is below the recommended minimum of 200 kilograms. Similarly, Egypt’s per capita consumption of animal products was 42 kilograms in 2019, which is below the global average of 49 kilograms. This low diversification of food basket and dietary patterns contributes to the high prevalence of malnutrition and micronutrient deficiencies in Egypt, especially among children and women. According to UNICEF, about 22% of children under five years old are stunted, 8% are wasted, and 29% are anemic in Egypt. Likewise, about 25% of women of reproductive age are anemic and 59% are obese in Egypt.

5. Weak food policies and governance

Egypt’s food policies and governance are weak and ineffective in addressing the challenges and opportunities of its wheat sector. Egypt has a long history of subsidizing wheat and bread, which dates back to the 1950s when it was introduced as a social safety net and a political tool to gain public support. However, this policy has proven to be costly, inefficient, and unsustainable in the long run. According to the World Bank, Egypt spent about 2.6% of its GDP on food subsidies in 2018, which is more than double the average of 1.1% for lower-middle-income countries. Moreover, this policy has created distortions and leakages in the wheat value chain, such as overconsumption, waste, smuggling, corruption, and rent-seeking. Furthermore, this policy has discouraged farmers from producing more wheat or switching to more profitable crops, as they receive low prices for their wheat and face high costs for inputs and irrigation. Additionally, Egypt’s food policies and governance lack coordination, transparency, accountability, and participation among different stakeholders, such as the government, the private sector, civil society, and consumers. This hinders the development and implementation of effective and inclusive strategies and reforms for improving the wheat sector and enhancing food security in Egypt.

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 2022, an increase of 1.4% from the previous year. However, wheat demand also grew by 1.8%, driven by population growth, urbanization, income growth, and changing consumption patterns. As a result, the global wheat market faces several challenges, such as ensuring food security, increasing productivity, improving quality, reducing environmental impacts, and coping with climate change.

Who are the biggest importers and exporters of wheat?

The global wheat trade is dominated by a few major players. According to the USDA, the top five wheat exporters in 2022/23 were Russia (39.5 million tonnes), the European Union (27 million tonnes), Canada (24 million tonnes), the United States (23.5 million tonnes), and Ukraine (18.5 million tonnes). These five countries accounted for 77% of the total wheat exports in that year.

On the other hand, the top five wheat importers in 2022/23 were China (28 million tonnes), Egypt (13 million tonnes), Indonesia (11.5 million tonnes), Turkey (10.5 million tonnes), and Italy (8.5 million tonnes). These five countries accounted for 45% of the total wheat imports in that year.

How has the global wheat demand changed over time?

The global wheat demand has increased steadily over time, reflecting the growing population and income levels, especially in developing countries. According to the FAO, the global wheat consumption per capita rose from 63 kg in 1961 to 67 kg in 2019, with significant variations across regions and countries. For instance, in 2019, the average wheat consumption per capita was 188 kg in North Africa, 147 kg in Central Asia, 110 kg in Western Europe, 79 kg in North America, 47 kg in South America, 43 kg in Sub-Saharan Africa, and 38 kg in South Asia.

The global wheat demand has also diversified over time, as consumers demand more variety, quality, and convenience in their food products. For example, there is a growing demand for high-protein wheat for bread making, low-protein wheat for noodles and pasta making, gluten-free wheat for people with celiac disease or gluten intolerance, and organic wheat for health-conscious consumers.

What are the main challenges and opportunities for the global wheat market?

The global wheat market faces several challenges and opportunities in the coming years, as it adapts to the changing needs and preferences of consumers, producers, and policymakers. Some of the main challenges include:

Enhancing food security and reducing poverty

Wheat is a vital source of calories and protein for many people around the world, especially in low- and middle-income countries. However, many people still suffer from hunger, malnutrition, and poverty due to insufficient access to affordable and nutritious wheat products. Therefore, improving the availability, affordability, accessibility, and quality of wheat is essential for enhancing food security and reducing poverty.

Increasing productivity and efficiency

Wheat production is constrained by various biotic and abiotic factors, such as pests, diseases, weeds, droughts, floods, heat stress, soil degradation, water scarcity, and nutrient deficiency. Therefore, increasing productivity and efficiency of wheat production is crucial for meeting the growing demand and reducing the environmental impacts. This requires investing in research and development of improved varieties, agronomic practices, pest management strategies, irrigation systems, mechanization technologies, post-harvest facilities, and digital tools.

Improving quality and safety

Wheat quality and safety are important for satisfying the diverse and evolving preferences of consumers and processors. However, wheat quality and safety are affected by various factors along the value chain, such as genetic traits, climatic conditions, harvesting methods, storage conditions, processing techniques, and contamination risks. Therefore, improving quality and safety of wheat requires enhancing the standards, regulations, certifications, traceability, and testing of wheat products.

Some of the main opportunities include:

Expanding markets and trade

Wheat markets and trade offer opportunities for increasing income, employment, and competitiveness of wheat producers, processors, and traders. However, wheat markets and trade are influenced by various factors, such as supply and demand dynamics, price fluctuations, trade policies, tariffs, quotas, subsidies, sanitary and phytosanitary measures, and non-tariff barriers. Therefore, expanding markets and trade of wheat requires promoting the integration, liberalization, diversification, and facilitation of wheat trade at regional and global levels.

Leveraging innovation and digitalization

Wheat innovation and digitalization offer opportunities for enhancing the productivity, efficiency, quality, and safety of wheat production and consumption. However, wheat innovation and digitalization are limited by various factors, such as lack of investment, infrastructure, skills, awareness, adoption, and regulation. Therefore, leveraging innovation and digitalization of wheat requires fostering the development, dissemination, adoption, and regulation of innovative and digital solutions for wheat value chain actors.

Strengthening collaboration and coordination

Wheat collaboration and coordination offer opportunities for addressing the complex and interrelated challenges and opportunities of the global wheat market. However, wheat collaboration and coordination are hampered by various factors, such as lack of information, communication, trust, incentives, and governance. Therefore, strengthening collaboration and coordination of wheat requires enhancing the information, communication, trust, incentives, and governance among wheat value chain actors and stakeholders.

References:

https://www.fao.org/faostat/en/#data/QCL/visualize

http://www.fao.org/faostat/en/#data/QC/

https://www.usda.gov/oce/commodity/wasde/wasde0223.pdf
https://databank.worldbank.org/source/world-development-indicators
http://www.fao.org/faostat/en/#home
https://www.cia.gov/the-world-factbook/countries/egypt/
https://www.undp.org/content/dam/rbas/doc/Energy%20and%20Environment/Egypt_WaterScarcity.pdf
https://www.bbc.com/news/business-10846680
https://siteresources.worldbank.org/INTPOVERTY/Resources/335642-1210859591030/Food_Price_Watch_Feb2011.pdf
http://www.fao.org/3/a-i2314e.pdf