Egypt’s wheat imports are set to decline for a fourth year in a row, as import costs remain stubbornly high due to the weakness of the Egyptian pound.
The North African country, which in most years is the world’s biggest wheat importer, is forecasted to import 11 million tonnes of the grain in 2023/24, down 2% year on year. The projected decline comes as domestic wheat stocks in Egypt, the most populous country in North Africa and the Middle East, are expected to drop to the lowest level in 20 years.
The Egyptian pound has lost nearly half its value against the US dollar in the past two years. Egypt’s wheat import prices are currently close to the highs that followed Russia’s invasion of Ukraine in 2022. (See chart below.) By contrast, Egypt’s wheat import costs expressed in US dollars are down 21% over the past year — and down 28% over two years — according to the Gro Food Security Tracker: Africa.
Russia is the No. 1 wheat exporter to Egypt, with substantial supplies also coming from Ukraine. Amid the Russia-Ukraine war, Egypt has had to seek out additional sources of the grain, including France.
View this Gro display of Egypt’s wheat supply, including data on imports, production, harvested area, and yield.
A weakened currency has compounded Egypt’s overall domestic food price inflation, since prices for many imported agricultural commodities are denominated in US dollars. The country’s food prices are currently 126% above levels in 2020, when global food costs began accelerating, according to Gro’s Agricultural Price Inflation Application, which measures a basket of commodities in local currencies.
Egypt’s own wheat crop, which was planted in September-November, is facing some adverse growing conditions, including “severe” drought as measured by the Gro Drought Index. Although most of the crop is under irrigation, NDVI index readings, a key measure of crop health, have been declining since mid-November and the index is currently at one of the lowest levels in more than two decades, according to Gro’s Climate Risk Navigator for Agriculture.
Egypt’s wheat, which will be harvested in mid-April through June, still has time to recover if conditions improve, but the situation bears monitoring.
While global wheat prices (represented by the orange line) have dropped substantially, Egypt's wheat import prices (blue line) remain sharply elevated due to a weak Egyptian pound. Egypt's currency has lost nearly half its value against the US dollar in the past two years — compounding domestic food price inflation since many imported commodities are denominated in US dollars. The high wheat import prices represent a setback for Egypt, whose domestic wheat supplies are projected to fall to a 20-year low.