Egypt is undertaking its largest-ever wheat tender, seeking 3.8 million metric tons, nearly 20 times its usual volume, driven by food security concerns following an intelligence briefing to President Abdel Fattah al-Sisi. As one of the world’s largest wheat importers, Egypt relies on the grain for subsidized bread, crucial for maintaining social stability.
In June, the government increased bread prices by 300%, raising fears of public unrest. The recent tender, however, only secured 7% of the target volume, highlighting challenges in sourcing adequate supplies amid fluctuating global prices. Currently, wheat prices are near a four-year low of about $200 per ton, prompting Sisi and his administration to act swiftly to lock in cheap imports.
Sisi’s direct involvement in the tender process is unusual, as such decisions typically fall under the supply ministry. The tender’s size, approximately $850 million, contrasts sharply with the usual 200,000 tons sought in past tenders, representing over half of Egypt’s annual wheat imports.
The decision to pursue this significant tender followed a briefing that flagged rising geopolitical tensions that could threaten wheat supplies from major exporters like Russia and Ukraine. Despite securing some quantities, the tender faced high seller prices, exacerbated by Egypt’s request for extended payment terms.
As Egypt grapples with an economic crisis, including a foreign currency shortage and record inflation, the government has sought support from Gulf nations and an $8 billion IMF package. The tender’s outcome reflects the urgent need for Egypt to stabilize its wheat supply while navigating the complexities of global markets.