Egypt shifts wheat purchases away from Russia and Ukraine as Black Sea trade costs rise

Cairo is shifting its wheat purchases from Russia and Ukraine to France, as reported by Reuters on September 20, according to comments made by Egypt's Supply Minister Sherif Farouk and confirmed by a ministry spokesperson. The disruption of Black Sea trade routes due to Russian and Ukrainian attacks on each other's shipping is causing shipping costs to rise and forcing grain buyers to seek longer and more expensive alternatives.

Ukraine's disrupted sea route has led to fewer or more expensive grain exports, which puts pressure on farmers' incomes and the country's export earnings. Egypt, being one of the world's largest wheat importers, relies heavily on grain for its subsidized bread program that feeds tens of millions of Egyptians. The supply minister also announced that Egypt has a 50,000-metric-ton wheat shipment en route from France, with more shipments from France to come, and that Egypt has increased its engagement with Bulgaria and Romania.

The war in the Black Sea has caused the cost of grain to increase significantly, as London's marine insurers have expanded the high-risk zone to the entire Black Sea. Russia has continued its attempts to destroy Ukraine's transport infrastructure and block its exports through the Black Sea, with more than 90% of Ukraine's agricultural exports being shipped from ports in Odesa Oblast through a maritime corridor.

The disruption of Ukraine's export capacity has resulted in a significant decrease in their handling capacity, and Russia's grain export capacity in the Azov–Black Sea basin has been largely offline due to Ukrainian attacks and the suspension of navigation in the Sea of Azov since July.