Egypt is working on several preventive measures to hedge the volatility of the wheat market amid the current tensions between Russia and Ukraine, the two largest wheat exporters in the world.
Minister of Supply and Internal Trade Ali al-Moselhi warned that the tensions are increasing the uncertainty in the market.
The official Middle East News Agency quoted Moselhi saying that the government has adopted several measures to secure wheat reserves and diversify its import origins.
He stated that the supply season for the strategic crop will start in April, adding that there would be a surplus and the strategic reserve will even last until November.
Egypt's wheat strategic reserve is safe and will suffice for more than five months, assured the minister.
"A finance ministry committee has been formed to study hedging policies, and discussions will be completed at the beginning of next month so we can decide if we should go forward with it or not," he explained.
A potential invasion of Ukraine by neighboring Russia could lead to interruptions to the flow of grain out of the Black Sea region, adding upward pressure on prices.
Russia has repeatedly denied it is planning such an invasion.
Data from two regional traders show that Egypt, one of the world's top wheat importers, bought about 50 percent of its wheat from Russia and about 30 percent from Ukraine last year.
The General Authority for Supply Commodities (GASC), the state's grains buyer, has diversified wheat sources and recently adopted Latvian wheat as a new import origin in November.
The government is also considering overhauling its decades-old food subsidy program, which provides a daily bread allowance to nearly two-thirds of the population.
According to the Finance Ministry, the program costs the government about $5.5 billion, with higher wheat prices expected to add $763 million to the 2021/2022 budget.
In December, Prime Minister Mostafa Madbouly said Egypt is "no longer isolated from global inflationary pressures," adding that it was time to "revise" the program.
Abbas al-Shenawy, an agriculture ministry official, had previously announced that Egypt planted 3.62 million feddans of wheat for the current 2022 season.
He explained that the cultivated area might increase slightly during the coming period, but will not exceed 3.7 million feddans.
The regular wheat planting season began in mid-November and ended in January.
Egypt imported 5.5 million tons of wheat in 2021, while the total domestic supply amounted to 3.5 million tons.
Last November, the Egyptian cabinet approved a procurement price of 820 Egyptian pounds per ardeb for wheat bought by the government from local farmers ahead of planting for the new season.
The new procurement price at 23.5 percent purity wheat was approved after a complete study by the agriculture and supply ministries, based on global prices and local costs per feddan unit of land.
