Plunged into chaos by a rapid rise in prices, Egypt is determined to harvest more wheat this year.
Egypt is perennially the number one or two wheat importer in the world.
The country’s agriculture minister Amin Abaza told the Middle East News Agency that he expects Egypt to grow eight million tonnes of wheat this year, compared to 7.4 million tonnes in 2007.
Furthermore, he wants the country to produce 65 percent of the wheat it consumes, up from the current proportion of 50 percent.
A spokesperson for the U.S. Department of Agriculture doubts that Egypt will be able to pull it off. And other observers say the Middle East generally will be challenged by rising population, increasing demand for grain, but scarce water resources and arable land.
Read Also
USDA’s August corn yield estimates are bearish
The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
“There’s not a whole lot of land lying around idle in Egypt,” said Edward Allen, senior economist for the USDA’s Economic Research Service. “They do produce a significant chunk of wheat in Egypt. But the economics of this production is pretty weak.”
Egypt typically imports seven million tonnes a year. The rapid climb in prices has rocked the country, where most people eat the round, flat bread every day.
The government spends huge sums subsidizing bread for the poor. It expects to spend an extra $850 million on subsidized bread this year, according to a report by the British Broadcasting Corp., raising the total bill to nearly $3 billion.
Still, the poor of Cairo have been forced to line up for hours outside bakeries this spring waiting for their daily loaf.
Politicians in the country of 80 million have reacted with promises of an Egypt less reliant on imported wheat.
Allen, who works in Washington, D.C., noted that Egyptians farm small tracts of land and are unlikely to switch to wheat because other crops offer better returns.
“Generally, on a small plot, the vegetables are of higher value,” he said.
Allen doesn’t expect Egyptian production gains to tilt world markets.
“With higher wheat prices, you should expect a little more wheat area. But Egypt is one of the largest importers of wheat, and they’re going to continue to be one of the largest importers of wheat,” he said.
Water availability is another factor for Egyptian farmers and for those throughout the Middle East.
Earlier this year Saudi Arabia announced it has given up on growing wheat on heavily irrigated land. Domestic production, currently at 2.5 million tonnes a year, will be scaled back over eight years. By 2016, the Saudis expect to be entirely dependent on imports.
Water is also precious along the Nile and Egypt’s agriculture minister announced April 15 that rice consumes too much water. He is encouraging farmers to switch to other crops, such as corn.
“Some of the limitations that agriculture faces there is definitely water,” said Bruce Burnett, director of weather and market analysis for the Canadian Wheat Board.
In much of the Middle East, Burnett said, agricultural production may be maxed out.
