Egypt officially withdraws from UN global grain agreement

Cairo officially withdrew on Tuesday from a decades-old UN grain treaty, over a year after Russia’s invasion of Ukraine threw the supply of staple wheat imports to Egypt into precarity.

The war between two of the world’s two largest wheat exporters endangered Egypt, the world’s largest wheat importer, and its 100-million-strong population who depend on the crop as a dietary staple.

The Black Sea conflict’s impact on global commerce also aggravated a persistent trade imbalance in Egypt. The country was thrust further downward in a prolonged economic spiral, prompting Cairo to withdraw from the 1995 International Grains Agreement to preserve scarce foreign currency resources, Supply Minister Ali al-Meselhy said in March.

Sources working in wheat milling, import and supply and the UN Food and Agriculture Organization who spoke to Mada Masr all pointed to the withdrawal as a sign that the costs entailed in being a signatory to the treaty outweighed the benefits for Egypt. 

Egypt joined 35 countries in 1995 who signed the trade agreement, which aspires to promote food security via commercial global free trade and information sharing between member states. 

But membership fees for signatories were high, and payable in foreign currency, according to a grain importer and a government source, both of whom spoke to Mada Masr on condition of anonymity. Given an order from Egypt’s Finance Ministry to reduce expenses, said the importer, the Supply Ministry took the decision to exit the treaty, while the General Authorities for Supply Commodities source said that Egypt was paying as much as US$600,000 per year to the convention. 

Though subscription to and membership to the treaty is nominally intended to support the supply of wheat to member states, especially in times of crisis, membership in fact represents a burden to Egypt at the present time without the country reaping any consequent benefits, said the supply commodities authority source.

Egypt Center for Economic and Strategic Studies deputy director Ali al-Idrisi told Sky News that Egypt, which relies mainly on importing grain from Russia, did not find adequate providence for its wheat needs from this agreement as expected due to the current conflict between Russia on the one hand and the European Union and the United States on the other,  as well as due to the adoption of several economic sanctions from both sides.

Egypt notified the UN in February of its intention to withdraw from the agreement as of the end of June, according to comments made by an anonymous Foreign Ministry source to Reuters. The source said at the time that a joint assessment carried out by the ministries of supply and foreign affairs concluded that Egypt’s membership in the agreement “does not entail added value” given grain prices have increased globally in the wake of Russia’s war on Ukraine.

The government has sought to increase the quantity of wheat harvested locally to reduce dependence on wheat imports, extending the season last year until the end of August instead of the customary close of harvest at the end of July.