Egypt planning for major wheat import savings, sources say

Egypt has developed plans to slash wheat imports and spend less on subsidised bread by adding corn or sorghum as ingredients, five industry sources briefed on the plans told Reuters.

The proposals could save the government millions of dollars but face opposition from bakers and millers who could lose out financially and argue that bread quality would suffer.

Egypt has been grappling with rising debt, foreign currency shortages and persistent inflation. The government says that its bread subsidy programme, which it aims eventually to phase out, is a major strain on the budget.

Under the supply ministry’s latest plan, which was presented to bakers and millers at the end of September, corn flour would be mixed with wheat flour at a 1:4 ratio, starting April 2025, saving about one million metric tons of wheat, two sources in the baking industry said.

The government scrapped an earlier plan to increase the rate at which flour used in subsidised bread is extracted from wheat, after resistance from industry lobbies, three of the industry sources said.

Egypt has floated wheat substitution schemes in the past as it strove for greater self-sufficiency. Corn was used for several years two decades ago before campaigning by industry groups pushed the government to abandon it.

Introducing corn flour as an ingredient could allow for significant hard currency savings if locally grown corn was used, though not if the corn was imported, according to two of the sources.

Russian Wheat, which Egypt heavily relies on, costs about $220 per ton at current market prices, while corn is priced around $200 per ton, according to LSEG data.

“At best, the government could save around $35-41 per ton,” said Hesham Soliman, a Cairo-based trader, referring to the widest likely spread between the two prices.

The change could also be unpopular, producing bread with a different texture and smell, Soliman and the five industry sources said.

Egypt’s supply ministry needs around 8.25 million tons of wheat per year to make subsidised bread available to more than 70 million Egyptians, according to the 2024-25 budget. Some 3.5 million tons are sourced locally and the remainder is imported.

The ministry did not respond to a request to comment.

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Tags: Egypt, corn, Bread, wheat, sorghum