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Good Weather Results in Above Average Winter Wheat Crop

27 August 2013

EGYPT - The 2013 winter grain harvest was concluded in May/June. Owing to favourable weather conditions, preliminary forecasts point to an above average cereal harvest.

Official reports from Egypt’s Ministry of Agriculture and Land Reclamation indicated the highest ever winter wheat planted area of 1.43 million hectares in 2013, an increase of about 100 000 hectares on last year, reports the FAO.

While the Government has forecast a record wheat crop of 9.4 million tonnes, analysts remain cautious about the final outcome especially given the high price of diesel and fertilisers.

Nevertheless, even if the Government harvest forecast does not materialise, the actual wheat harvest will exceed the five-year average. Harvest losses usually account for about 15 to 20 percent of production due to poor storage conditions and transportation.

Elsewhere, to support small-scale farmers, the Government pledged EGP 473.2 million (USD 68 million) in the 2013/14 fiscal year (July/June), compared to EGP 183.9 million (USD 26.4 million) in 2012/13.

Part of the support worth around EGP 113 million (USD 16.2 million) has been the value of debt cancellations for Egypt's small-scale farmers suffering from loan delinquency.

Below average cereal import requirement envisaged

Despite the attempts to increase its self-sufficiency in wheat, Egypt remains the world’s largest wheat importer. Accordingly, cereal import requirements in the current marketing year 2013/14 (July/June) are put at about 14.9 million tonnes, about 12 percent higher than last year but some 7 percent lower than the five-year average.

While imports in the first half of 2013 were slow, the General Authority for Supply Commodities (GASC) announced that Egypt imported 780 000 tonnes of wheat of mostly Romanian, Russian and Ukrainian origin in between 18 July 2013 and 12 August 2013, driving wheat strategic inventories to suffice until the end of 2013.

According to the reports, the Government aims to increase total wheat stocks to between 5 and 6.5 million tonnes by the end of the current fiscal year in June 2014. Imported wheat is mixed with local wheat to increase its gluten content.

Millers reported of being advised to reduce the amount of international wheat in flour. As of late July 2013, the GASC purchased 3.7 million tonnes of wheat from local farmers, some 40 000 tonnes less than the same period of last year.

Of a particular concern remains the ability to import wheat and fuel, and the availability and prices of fertiliser. The deficit of petroleum products, especially diesel is likely to have a negative impact on harvesting and could hamper moving crops to urban centres.

As of 31 July 2013, net international reserves held by the Central Bank of Egypt amounted to USD 18.9 billion compared to USD 13.4 billion in March 2013 and USD 36 billion in early 2011 due to a widening trade deficit and the continued decline in revenues from tourism and foreign direct investments.

Part of the pledges of support from Saudi Arabia, UAE and Kuwait were used to strengthen Egypt’s currency reserves, while part are to be used to purchase strategic commodities.

Between September 2012 and August 2013, the Egyptian pound lost to US dollar (from USD 1 selling at EGP 6.08 to 6.9) thus increasing prices in local markets despite easing prices on the world markets.

TheCropSite News Desk

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