Upheavel in Egypt worries Australian wheat exporters

Australian wheat exporters were looking closely at their Egypt trading contracts yesterday, as huge crowds of protesters continued to throng Cairo and call for the resignation of the President Hosni Mubarak, reported The Australian.

Egypt is the biggest milling wheat importer in the world and the ninth-biggest buyer in the world of Australian wheat, having bought almost half a million tonnes in 2008-09.

Experts have noted that the recent rise in global wheat prices has been one of the triggers for unrest in wheat-dependent North African countries such as Tunisia and Egypt. This means that whoever runs Egypt must work extremely hard to maintain continuity of supply.

The March 2011 wheat futures price in Chicago is testing new highs at about $US8.45 ($8.35) a bushel, compared with prices below $US6 for the first half of last year.

Most Australian contracts in Egypt are with private milling groups, which buy high-quality wheat in containers, but there’s also a major trade with the Egyptian government in lower-quality wheat used to make flat bread.

A senior official said the government had been buying big quantities of wheat on the international market.

Reuters yesterday quoted Nomani Nomani, vice-chairman of the General Authority for Supply Commodities in Egypt, as saying his organisation had recently bought enough wheat to cover the next six months and had about 10 months’ advance stocks.