Egypt, the world’s largest wheat importer, is struggling to buy the staple in the international market because of the impact of a currency crisis, creating a fresh challenge to the government of Mohamed Morsi, the Islamist president.
Grain traders shipping wheat to Egypt said Cairo had cut back on its overseas purchases as the Egyptian pound plunged against the US dollar. The slowdown has depleted the country’s grain stocks to unusually low levels, traders added.
Cairo on Wednesday said that government inventory levels of wheat, usually at enough to cover six months’ worth of consumption, had almost halved to just 101 days. “They are living hand-to-mouth,” said one Swiss-based international grain trader.
The Egyptian cabinet added that wheat reserves would stretch by another month with the arrival of supplies tendered for delivery in March and April.
With more than 40 per cent of Egyptians living below the poverty line, subsidised bread is an important part of the Egyptian government’s strategy for maintaining social peace. Lower inventories made it vulnerable to any supply disruptions, analysts and traders said. (Emiko Terazono in London and Heba Saleh in Cairo)