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Palouser
Senior Advisor

Wheat: Largest export sales and commitments as of July in 25 years

This partly reflects the largest commitments of US wheat to China ever.  Both shipments and sales overall are the largest in 24 and 26 years.

 

 

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11 Replies
Palouser
Senior Advisor

Egypt's biggest mistake?

Thanks to Jerry Gidel

 

Egypt's wheat problem: how Mursi jeopardised the bread supply - RTRS

25-Jul-2013 03:38

(This story is part of a special report on Egypt (PDF) http://link.reuters.com/gej89t)

By Sarah McFarlane

CAIRO, July 25 (Reuters) - The biggest mistake deposed Egyptian President Mohamed Mursi made during his year in power was dramatically reducing wheat imports, according to Mohamed Abu Shadi, the country's new minister of supplies.

 

Lack of money and a quixotic attempt at making Egypt self-sufficient spurred the decline, say officials familiar with the matter. Mursi dreamt of making Egypt grow all its own wheat and allowed imported stocks to fall to precariously low levels. It hurt both the country's wheat stocks and Mursi's government.

With a quarter of Egypt’s 84 million people living below the poverty line of $1.65 a day, millions depend on subsidised bread that sells for less than 1 U.S. cent per loaf. That supply relies on foreign wheat.

 

The country is the world’s largest wheat importer, bringing in about 10 million tonnes a year, around half its annual consumption. Keeping the system running smoothly was vital when Mursi, backed by the Islamist Muslim Brotherhood, took over as president in June 2012.

Mursi appointed Bassem Ouda, a 43-year-old engineer, as minister of supplies. Ouda, who took office on January 6, said Egypt’s $3 billion programme for subsidised bread would be his top priority. However, he and Mursi promptly began talking about Egypt becoming self-sufficient by more than doubling its wheat production to meet its needs of over 18 million tonnes a year; at the same time they made big reductions in wheat imports and began eating through stocks.

 

In May, Mursi was quoted during a festival to celebrate the harvest season at a farm near the northern city of Alexandria as saying: “By God's will, in two years we will be achieving more than 80 percent of our needs, and seek in four years not to import wheat." [ID: nL6N0DW5JX]

It was a an ambitious target; critics called it foolhardy.

 

“Many people were disconcerted and unhappy with the government for making statements that we would become self-sufficient," said Adel Beshai, professor of economics at Cairo's American University. "Every villager knows we cannot become self-sufficient, any illiterate farmer could tell you we could not be self-sufficient, so people felt they were being lied to.”

While Egypt is one of the oldest agricultural civilisations, once the granary of the Roman Empire, it can no longer feed its modern population, which is mostly crammed into the fertile Nile valley and delta, a narrow strip surrounded by huge areas of arid land. Egyptian agriculture is almost entirely dependent on irrigation with more than 90 percent of the country desert.

 

The U.S. Department of Agriculture estimated Egypt’s latest harvest at 8.5 million tonnes of wheat. The subsidised bread program alone requires around 9 million tonnes of wheat. Local wheat is low in gluten so it is mixed with foreign wheat in roughly equal parts to produce flour suitable for making bread. Much of what remains of the Egyptian crop is consumed on farms.

A lack of funds also played a part in Egypt’s failure to import wheat, according to a government source familiar with the matter. As it faced economic crisis, the Islamist government began exploring alternative methods of procuring wheat.

 

"They were looking at barter deals for oranges and potatoes," said a second source with experience of the inner workings of GASC, the state grain buying agency, adding that Russia imports a lot of Egyptian potatoes and oranges and is a key supplier of wheat.

 

The result was inaction. “This was an extension of what was happening in the rest of the ministries and the rest of the country,” said the government source.

 

On July 10, days after Mursi was ousted and Ouda resigned, Ouda said government stocks were 3.5 million tonnes, including 500,000 tonnes of foreign wheat. This compared with 4.9 million tonnes on July 1 last year, including 1.2 million tonnes of imported wheat.

 

The government source said that the risk of shortages could be reversed with proper management: “All you need is speedy decisions to enter the market at the right times.”

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pritchh
Senior Contributor

Re: Wheat: Largest export sales and commitments as of July in 25 years

13/14, we are projected to export 1.075 b bu, rebound from 12/13, why, because it  is there.  Corn use in 12/13, lower, why, it wasn't there.   Correction here: 13/14, July  WASDE prod 697.8  mmt, feed use 138.7,    ES 172.38 ,

ES revised down ~10 reflecting some of the siutations Pauloser raises.

 

ES/USE world basis  ~25%

 

We need large exports to avoid going really low to find a home for unneeded wheat.

 

           

 

           

 

 

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pritchh
Senior Contributor

Re: Wheat: Largest export sales and commitments as of July in 25 years-wkly #.

Again, not sure how long you have been involved, FYI, exports and commitments are a weekly number. Any one number is
meaningless, cumulatively they are compared with expected annual  expectations.   12/13 saw a big fall off in exports, by
nature there is some make up to do.  We will export ~29 mmt vs just 19 in 12/13. Or again we NEED big exports or be stuck
with even more burdensome supply

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Palouser
Senior Advisor

You are a riot Artie/Pritch

You just aren't receptive to any information but your own conclusions Smiley Very Happy

 

Contrary to what your expectations may be Artie/Pritch, the info I forward isn't necessarily for you. Apparently you are equipped to go on your own.

 

I just feel that there are those who like info on the global wheat trade dynamics. I understand that you view anything (from me) that doesn't fit your ideology at the moment as a (personal) affront - it's just not my problem. I'm not looking for an answer, I'm watching the ebb and flow. If somebody else would like to supply wheat information - including you - to the board then I think that's a good thing. This board is understandably more corn/bean oriented but there are wheat producers here too.

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pritchh
Senior Contributor

Re: You are a riot Artie/Pritch

Nothing oersonal but there are bull mkts and bear. An idology of thinking one can post supposed bullish stories for 24 minths and have it matter, belies an idology. For produces with crops to market, the current supply demand unfolding matter. Holding a crop for better prices, assumes there will be higher prices.  See CZ3, CU3, trend history, .

 

Egypt who can't seem to afford wheat but has a need to refill stks by 2 mmt, isn't a market factor is the useful point.

If any of these storie could rally wheat, there would be a great thing, a producer could fell the headline reader's demand.

But it is so heavy, the mkt can't monut any rally it seems.

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pritchh
Senior Contributor

Re: You are a riot Artie/Pritch

"not receptive to any information"    please explain what information I am to be reciptive to?  i have been reciptive, and put it in context.

"myown conclusions" actually facts . .

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Palouser
Senior Advisor

Re: You are a riot Artie/Pritch

We've been over this ground numerous times over the years Pritch'

 

I present information, not recommendations regarding marketing.

 

I don't forecast prices. I remind people to stay informed.

 

I don't push 'patterns' as you do as I don't find them useful.

 

For some reason you find this threatening. Again, not my problem.

 

Information of the nature I post can hardly be categorized as 'wrong' as I almost always have documentation of the sources. It's up to the reader to judge the information. We're all grown ups here.

 

The times you have challenged specific information you have never once specifically cited a current source and in fact have often been dead wrong on your opinion judging by news sources (such as the condition of Egypt's economy).

 

As for your market generalizations, you and anyone else are welcome to them. But, had I followed your line of thinking I would have missed almost all of the best opportunities the last 5 years or more. These have been the best of times marketing for me. So I can hardly take offense that you and I disagree.

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pritchh
Senior Contributor

Re: You are a riot Artie/Pritch

Endless supposed bullish "informed" / as the market makes new lows near daily, in its 24 month downtrend?

 

There is no generalization, it is specific, 1 weeks's export #s is meaningless, even forJerry Gidel.

That is informative.

 

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pritchh
Senior Contributor

Re: Wheat: Largest export sales and commitments as of July in 25 years

May be way out if line but a theme is review history, crop prod, prices, use etc.

Use those facts and background and  create your mkting strategy from there.

 

The here and now vs some wish that isn't going to happen.

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