Egypt plans to start hedging its wheat purchases next year
Egypt plans to hedge against global wheat price increases next year, Finance Minister Mohamed Maait said.
“There is a good possibility that we do the wheat hedging next year,” Maait told Bloomberg News in an interview in Marrakech, Morocco, where he’s attending the annual meetings of the International Monetary Fund and the World Bank.
One of the world’s top wheat importers, Egypt is already in talks with multiple banks on the plan, Maait said Thursday, without identifying them.
Egypt has signaled numerous times in recent years that it planned to start hedging wheat. In 2021, the country’s supply minister said it was in talks with Citigroup Inc. over protecting itself against price increases. That followed negotiations three years earlier with other banks.
The country already takes such steps in the oil market. To mitigate against increases in global fuel prices, the finance ministry hedged close to 50% of its imports up to June 2024, Maait said.
Egypt relies on subsidized wheat to feed its population. Global prices have halved from records reached last year, but remain volatile in the wake of Russia’s invasion of Ukraine. Egypt’s ongoing foreign currency crunch has also added to food-import challenges.