Unrest in Egypt causes fall in wheat prices

Protests in Egypt have caused wheat prices to fall, as investors worry about stability in Africa and the Middle East, reported Australian Broadcasting Corporation.

Egypt is one of the world’s largest wheat importers, and is one of Australia’s most important customers.

The main wheat buying authority in Egypt says the country has a six-month stockpile of wheat, and doesn’t need emergency supplies.

Malcolm McMahon, from grain trader Emerald, says food security is becoming a big issue in the Middle East.

“The wheat markets have been very strong over the last few months and that’s maybe partly the reason why we’re seeing some political unrest,” he said.

“The price is very high for wheat into those countries.

“Ironically, it [the instability] could lead to more demand and potentially sightly higher prices for us.”

Mr McMahon says food security concerns in the Middle East, particularly in Morocco and Saudi Arabia, is growing.

GrainCorp says it hasn’t seen any distruption and doesn’t expect any problems with wheat exports in Egypt.

A spokesman says a lot of Australian wheat purchased in that country is privately bought.

Spokesman David Ginns says the Egyption wheat market is split into two: the Government controlled body which buys and controls the price of wheat, and the private industry.

Egypt’s expanding middle class typically buys a higher quality flour from private millers in Egypt, and Mr Ginns says the Australian wheat market typically sells to private millers.