Global wheat prices expected to soar

Daily News Egypt
2 Min Read

By Basma Tharwat

The drought that recently hit the United States and Russia, the largest wheat exporters in the world, triggered fears of a global price rise of the strategic commodity.

One of the world’s largest wheat importers, Egypt is expected to suffer greatly as a result.

Noamany Nasr Noamany, Vice President of the General Authority for Supply Commodities (GASC), denied that the US drought would have a negative impact on the cost of Egyptian wheat imports. Noamany said white wheat imported by Egypt is grown in the northwest of the US, which was not affected by the drought.

In addition, Egyptian wheat imports are minor compared to imports of other countries. Noamany said last season, Egypt imported 300,000 tonnes of wheat, compared to 3.6 million tonnes imported by Russia. The US drought will definitely force up international wheat prices during the current year, he added.

He also expects the increase to reach between $60 and $80 per tonne, which would drive the price per tonne above $300 compared to last year’s price of $237. The price increase is expected to cause a global shortfall of wheat production. The impact of the drought will pull up corn and soybeans prices as well increasing grain prices in general.

Noamany believes that despite these factors, prices are unlikely to reach the level of 2008, following the global financial crisis, when the price reached $500 per tonne. He added that amounts of wheat provided to the GASC increased from 2.613 tonnes last year to 3.714 tonnes this year, and have helped shrink wheat imports by 1.1 million tonnes.

The Director of the Grain Chamber Productionat the Federation of the Egyptian Industries (FEI),Ali Sharaf, expects the drought that struck several areas in US and Russia to greatly boost global wheat prices by approximately 20 percent.

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