U.S. Wheat Associates to close Cairo office as Russian wheat dominates
U.S. Wheat Associates, a trade group that promotes U.S. exports, announced Tuesday it will close its Cairo office in December, reflecting the loss of market share of U.S. wheat in Egypt.
Egypt is the world’s biggest wheat importer and has turned to Russia and other suppliers in the Black Sea region. Russian wheat production has soared in recent years, and higher freight costs by about $17 a tonne have made U.S. wheat less competitive compared to Russian supplies.
The North African country has been sourcing most of its wheat in recent years from Russia, which was projected by the U.S. Department of Agriculture to harvest a record-large crop this year of 82 million tonnes.
The Cairo office is scheduled to close by Dec. 1, U.S. Wheat Associates spokesman Steve Mercer said. The office has four employees whose positions will be eliminated.
“It’s really a process of refocusing our resources on markets that have a better chance of return and frankly more value to the U.S. farmer,” Mercer told Reuters.
As recently as the 2012/13 marketing year, Egypt was the No. 5 market for U.S. wheat overall and the No. 2 buyer of U.S. soft red winter (SRW) wheat, grown in the southern Midwest.
By the time the 2016/17 marketing year ended on June 1, Egypt had fallen in rankings to the No. 37 buyer for U.S. wheat overall, according to the U.S. Department of Agriculture.
Egypt’s main state wheat buyer, the General Authority for Supply Commodities (GASC), made its first purchase of U.S. wheat in more than two years in May.
The Associates (USW) is the export market development organisation for the U.S. wheat industry with funding from 17 state wheat commissions and USDA’s Foreign Agricultural Service.
USW President Vince Peterson said in a statement that the organisation saw a need to begin adjusting its activities in the Middle East and North Africa several years ago as the supply of significantly lower priced wheat from Russia increased.
USW will continue to provide trade service to government wheat buyers in Egypt, Iraq, Saudi Arabia, and other countries in the region on a targeted basis, Peterson added.
“The organisation eliminated a Cairo-based marketing position in 2014. This allowed USW to add an experienced technical specialist in its Casablanca, Morocco, office. In 2016, USW shifted regional management for the Middle East operations to its office in Rotterdam, The Netherlands.” the USW statement added.
