Wheat prices in Egypt soar amid currency volatility, war disruptions: Platts report
According to a new report by Platts, part of S&P Global Energy, the cost of milling wheat has surged amid renewed pressure on the Egyptian pound, which has dropped to over 52.39 EGP to the dollar.
EGYPT – Wheat prices in Egypt have climbed sharply in recent weeks as a combination of Egyptian pound depreciation, tighter global supplies from the Black Sea region and logistical disruptions linked to ongoing conflict have pushed import and domestic spot values upward, according to a Platts report from S&P Global Energy.
The report highlights that Egypt, one of the world’s largest wheat importers, is particularly exposed to currency fluctuations and international supply shocks, which quickly translate into higher local market prices and inflationary pressure on staple foods.
Wheat prices in Egypt have surged to record highs as a depreciating currency, higher fuel costs and mounting logistics problems ripple through the country’s grain market in the wake of the war in the Middle East.
Local wheat prices for 12.5% protein, exwarehouse, have jumped from Egyptian pounds 12,400/metric tonne to 14,300/metric tonne since the conflict began on February 28, according to several market participants.
The sharp rise has coincided with a steep depreciation of the Egyptian pound, which has fallen about 9.4% since the start of the war to 52.39 EGP per US dollar on March 13, its weakest level on record.
The government’s recent fuel price hike has further driven up transportation costs, and prices for refined soybean oil have also soared, rising from Egyptian pounds 63,000/ metric tonnes to 70,000/ metric tonnes, compounding pressure on grain prices.
Market participants told Platts that the volatility is affecting not just wheat but also corn and soybean oil.
Importers are facing additional hurdles, as some Egyptian buyers who rely on banks in Dubai said that some institutions have either closed operations or suspended services, leading to delays in payment processing.
Due to a weak currency, buyers report that wheat import prices are now equal to domestic prices, whereas local prices are typically lower.
Since the war began on February 28, CIF Egypt 12.5% bids have risen by 2.7% to US$263/metric tonne, with freight from Russia to Egypt climbing to US$24/metric tonne from US$21/metric tonne on March 13.
Egypt, the world’s largest wheat importer, is forecast to import 13 million metric tonnes of wheat during the marketing year (July-June).
As of early March, it has bought 9.5 million metric tonnes, according to local shipping data LATT Trading and Shipping.
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