MENA Countries Face Serious Threat to Secure Wheat as Ukraine Crisis Continues

Wheat importing countries in the Middle East and North Africa (MENA) face a serious threat to secure supplies following Russia’s invasion of Ukraine closed access to the lower coast Black Sea grain they import in big quantities. The countries can’t import from either Ukraine or Russia due to shipping from the Ukraine’s ports has been halted and financial sanctions have made payments of Russian wheat almost impossible.

As a result, all countries have been looking for alternative suppliers. Russian and Ukrainian wheat exports are not expected to resume  until the fighting ends.

However, surging prices and possible export restrictions make switching to alternatives costly. Moreover, domestic production in the MENA region is limited due to water scarcity and rising input costs.

Among the MENA nations, Gulf countries are relatively comfortable as they are protected by fiscal surpluses. But countries like Lebanon and Egypt remain highly vulnerable as they depend on wheat imports and household spending on food has increased considerably.

The world’s largest wheat importer Egypt bought 80% of its wheat from Russia and Ukraine last year. The state grain buyers had to cancel two tenders due to a lack of offers and high prices since Russia’s invasion of Ukraine. Two Egyptian cargoes are also stuck at Ukrainian ports.

Russia and Ukraine account for about 29% of global wheat exports. Since supplies from them have come in doubt, Chicago wheat futures have risen to a 14 year high on Monday.

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