Egypt Wheat Export: Cheap Indian Wheat Confronts Quality Checks & Expensive Freight Costs

Indian wheat might be a cheaper choice for the largest importer Egypt, but it will have to overcome the country's agricultural ministry's quality requirements as well as higher freight expenses.

According to a ministry document obtained by Reuters, Egypt's agricultural ministry accepted India as a wheat import origin last week, but with several conditions, including pest inspection prior to shipment and the use of just one pesticide.

"We don't accept anything just because we approved the origin. The plant quarantine department has specified technical requirements "The department's head, Ahmed El Attar, told Reuters.

Wheat exports from India have historically been beset by quality issues connected to the fungal disease Karnal Bunt and abuse of pesticides, with some suppliers getting complaints a few years ago. Traders and government officials in India, on the other hand, claim that they have had no objections from countries such as Bangladesh, South Korea, Sri Lanka, Oman, and Qatar, among others, while shipping huge quantities this year.

Traders also predicted that freight costs would be a burden for Indian suppliers, with the lowest freight rate on Tuesday being $70 per tonne.

"The freight cost for Indian wheat to Egypt would be approximately $70 per tonne, compared to $30-$40 per tonne for supply from the Black Sea region," said Rajesh Paharia Jain, a prominent New Delhi merchant.

India's wheat exports exceeded 7.85 million tonnes in the fiscal year to March, an all-time record and a dramatic increase from 2.1 million tonnes in the previous year.

Both nations were pleased to learn that India had been added to Egypt's list of acceptable import origins. India is attempting to capitalize on its production excess, while Egypt seeks reduced costs following Russia's invasion of Ukraine, which hampered its purchases, which accounted for around 80% of its total last year.

Recent export deals from India have been completed for $330 to $335 per tonne free-on-board, which is more than $100 less than European proposals purchased by the General Authority for Supply Commodities (GASC) in its most recent tender.

Before its last purchase last week, GASC has canceled two bids since Russia's invasion of Ukraine. Since the permission, it has yet to release a tender, and it is unclear whether it would include India as an origin in its next tender book.