Tonnes of Wheat Trapped in Egyptian Ports Amid Dollar Squeeze, Official Says

CAIRO (Sputnik) - Nearly a million tonnes of wheat remains blocked in Egyptian seaports amid lack of US dollars in the country, a member of the Chamber of Cereals Industry told Sputnik on Tuesday.

"Some 800,000-900,000 tonnes of wheat has accumulated in Egyptian ports over the past three weeks. We expect this cargo to be released, which is impossible for now because of a dollar shortage," Walid Diab said.

Egypt has been spending more and more dollars on imports and other international obligations during the pandemic after racking up a record $45 billion in net foreign reserves in 2020. Dollar reserves shrank to $33.1 billion in summer.

The dollar shortage has pushed upwards the price of unsubsidized bread and other baked goods and has led to a rise in corn and soy prices, unleashing a domino effect in the animal feed, meat and poultry markets, Diab said.

The cereals chamber, affiliated with the Federation of Egyptian Industries, has informed the ministries of finance and supply about the hold-up in wheat imports, but Diab said the Central Bank of Egypt was ultimately in charge of dollar management.

"The central bank’s regulatory easing allowed us to conclude contracts and ship goods to the ports. Now we need dollars to claim them," the official explained.

The Egyptian pound has lost a quarter of its value against the dollar since March, prompting the CBE to raise the key interest rate to 11.75% in a bid to curb inflationary pressures. Egypt is also seeking IMF support of its economic reform program.