EGYPT – The Central Bank of Egypt (CBE) has decided to exclude, for one year, imports of rice, beans and lentils from the 100-percent cash margin requirement imposed on most imports.
In a statement, the bank said the exemption will be applicable till March 15, 2023. The decision comes as part of efforts to secure needs of the local Egyptian market and facilitate import procedures.
The directive is applicable on all import requests submitted by companies after taking into consideration the credit study conducted by each bank.
Meanwhile, the land of Pharaoh, has also suspended the export of wheat, flour, pasta and lentils for three months, starting March 11, Masrawy news portal reported, as it experiences a dramatic increase in the price of unsubsidized bread and other staples.
The recent increase in the inflation rate from 4.9% a year ago to 10% in February largely was attributed to a surge in prices of food, especially vegetables, bread and grain.
The price for a pack of five flatbread loaves is now about 7.5 Egyptian pounds (48 cents), up from 5 Egyptian pounds a week ago. Subsidized bread is about 5 Egyptian pounds, but the government has said a price increase likely will happen.
Egypt’s Prime Minister Mostafa Madbouly said the country has enough wheat reserves for four months.
The wheat harvest season will begin in mid-April so the country will have no need to resort to the global market until the end of the year, he said.
Ukraine and Russia war threaten Africa’s food security
The move is also in response to the recent conflicts between Ukraine and Russia which has disrupted global trade of key commodities such as cereals and vegetable oils.
Egypt is the world’s top wheat importer, and from 2020 to 2021, most of that, about 12.5 million tonnes, came from Russia and Ukraine
With this trade prohibition, Egypt joins in particular Benin , Côte d’Ivoire and Mali , which have also taken measures in recent months to limit the exit from their territory of several agricultural products.
According to a recent report from Germany’s Kiel Institute for the World Economy (IfW), African countries may be hit hard by any continuing halt to Ukraine’s grain exports caused by the war.
“The country supplies large quantities of grain to North African states in particular, which other sources of supply could not replace even in the long run.
“The war in Ukraine could significantly worsen the supply of cereals used in food production in African countries, making food more expensive if Ukraine ceases to be a grain supplier,” the institute said.
Grain importers globally have been hit by surging prices, with wheat around 14-year highs following the sudden stop of exports from Ukraine and a sharp reduction from Russia. The conflict has closed-grain export ports.
Russia and Ukraine contribute nearly 30% of global wheat exports along with large volumes of animal feed grains and edible oils, with shipments massively cut by the fighting.
Among the countries hardest hit could be Tunisia, where the country’s total wheat imports would decrease by over 15%. Egypt would import over 17% less while South Africa would import 7% less.
Grain imports would also be noticeably disrupted in countries including Cameroon, Algeria, Libya, Ethiopia, Kenya, Uganda, Morocco and Mozambique.