Egypt will buy 250,000 tonnes of wheat from the US and Europe to secure its supply resevres in the coming months, the country's Minister of Agriculture Amin Abaza said yesterday. "Russia won't cancel its commitment to sell wheat to Egypt, but will halt exports," Abaza told a press conference, in which he announced exporting 150 tonnes of Egyptian wheat seeds to Afghanistan, in Cairo yesterday. Russia declared last week a ban in wheat exports from August 15 to the end of the year. Abaza told the gathering, which was attended by US ambassador in Cairo Margaret Scobey, that Egypt had a plan to increase wheat production to meet growing demand. "Egypt has strategy to be wheat self-sufficient within 15 years," he said, adding that local harvest of grain totalled 2.5 million tonnes in 2010. The Russian ban has sent the world market to a state of frenzy. Wheat prices have shot up by around 50 per cent since June due to the Russian drought and floods during the planting season in parts of Canada, the world's second-largest exporter. Meanwhile, wheat futures gained yesterday, snapping a two-day decline, on concerns that the worst drought in at least half a century in Russia and other exporters in the Black Sea region will extend production losses. Very hot and mostly dry weather dominated the eastern portions of European Russia and western portions of Asian Russia, and temperatures averaged 38 degrees Celsius to 41 degrees Celsius in central Ukraine and eastern Belarus on August 8, Telvent DTN Inc. said in a report yesterday. The same weather pattern will prevail in the 10 days from August 9, it said. "The market attention continues to remain fixated on the Black Sea production/export situation," Commonwealth Bank of Australia said in a statement carried by Bloomberg. World production may be 645.7 million metric tons in the year ending June 2011, smaller than last month's estimate of 656.4 million tons, and down from 674.9 million tons a year earlier, researcher F.O. Licht said yesterday. Licht pared its estimates for harvests in Kazakhstan, France and Germany. The total harvest from Russia is expected to be 44 million tonnes this year, 21 per cent less than the 56 million tonnes forecast in July and down from 61.7 million tonnes in 2009. Still, wheat supply will be more than sufficient to meet demand, even as less grain is available, said Keith Flurry, an analyst at Licht. The US, the world's largest exporter, will be able to meet much of the international demand that can't be handled by exporters from the Black Sea, he said.
