India may be able to export only 1 million mt of wheat to Egypt in marketing year 2022-23 (July-June) due to quality and logistics issues, trade sources told S&P Global Commodity Insights. This comes after the Indian government announced plans to raise exports to Egypt to around 3 million mt in MY 2022-23 after it gained approval from the Middle Eastern country to be a source of supply in the week of April 15.
India has been planning to capitalize on the shortfall in supply from the Black Sea following Russia’s invasion of Ukraine and ramp up its exports to key importers.
Egypt used to depend on the Black Sea region to meet most of its domestic demand, with Russia and Ukraine combined accounting for over 80% of the country’s wheat purchases.
The US Department of Agriculture’s Cairo post of the Foreign Agricultural Service has estimated the country’s wheat imports at 11 million mt in MY 2022-23, down from 12 million mt in MY 2021-22.
Egypt cancelled two tenders, shortly after the Russia-Ukraine war started, due to sharply high prices and forced it to look for cheaper origins, traders said.
Egypt usually buys a significant quantity of wheat via its state grains buyer, the General Authority for Supply Commodities. It had 16 recognized wheat origins — including the US, Russia, Ukraine, France, and Germany — before including India to the list.
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Despite having surplus wheat stocks for some years, quality concerns have in the past stymied India’s efforts to sell large volumes on the world market.
According to experts, Indian wheat requires 120 kg of nitrogen, 60 kg of phosphorus and 30 kg of potash per hectare to achieve optimum yields. However, the quality of the wheat produced in India suffers due to a deficiency of micronutrients like zinc, iron, copper, and sulfur. Most of India’s wheat is typically hard wheat, with a protein content of 10%-13% and gluten content.
India still has logistical concerns that stand in the way of beginning exports immediately. The country usually requires up to 15 days to complete inspection and certification of bulk shipments.
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