Egypt raises procurement price for local wheat by 25% to curb rising inflation
EGYPT – Egypt, a major wheat importer, has raised the procurement price of local wheat to EGP 2000 (US$41.32) per ardeb (150 kilograms) for the 2024/25 season in a bid to incentivize farmers to sell their produce to the state as well as curb rising inflation.
The revised incentive is a 25% jump from EGP 1600 (US$33.16) previously announced in November for the 2024 season.
A cabinet statement said that the initial price, EGP 1600, was worth US$51.86 before Egypt devalued its currency last week.
On March 6, the Egyptian pound was cut to about EGP 50 to the dollar from just under EGP 31, where it had been fixed for the previous 12 months. Since then, the pound has gradually strengthened, trading at 48.40 as of March 13.
Egypt has one of the highest per capita consumption rates of wheat in the world. With such high demand, Egypt is forced to rely on imports as local wheat production, despite being the highest in Africa, is unable to meet the local demand.
The country imports 12 million of the 18 million tons the country consumes annually, according to 2022 Food and Agriculture Organization figures.
This prompted the government to come up with measures to raise local production in line with President Abdel Fattah El-Sisi’s interest in expanding the cultivation of strategic crops, particularly wheat.
Among the raft of measures set by the cabinet is the revision of incentives on local wheat purchases to increase local wheat prices as a measure to support local production and subsequently reduce the import bill of wheat.
In 2023, the Egyptian Ministry of Finance allocated 45 billion EGP (US$ 1.5B) to purchase local wheat from farmers, a step forward in supporting and encouraging farmers to expand the cultivation of strategic crops.
Mohamed Maait, the Finance Minister revealed the grant allocation surpassed the previous year’s bill by more than 19 billion EGP.
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