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Russia’s withdrawal from grain deal to have economic consequences for Egypt — experts

In their opinion, this could lead to even more inflation

CAIRO, July 20. /TASS/. Russia’s withdrawal from the grain deal will have a negative impact on Egypt, triggering inflation, according to Egyptian experts.

"Russia’s withdrawal from the grain deal leads to the decrease in supply on the market and the growth of prices. It means that developing countries will not be able to buy cheap wheat and grain," the Al-Ahram newspaper on Wednesday quoted Rashid Abdou of the Egyptian Economic Research Forum as saying. "What is happening now will trigger higher inflation in many countries, especially in Egypt."

Despite the fact that "Egypt has agreements with Russia that envisage that the country will meet its demand in Russian wheat, negative impacts will still be felt because grain prices will go up," he added.

"Although Egypt and Russia have an agreement on Egypt’s access to wheat, Moscow’s decision not to extend the deal will have a serious impact, since it will force us to import from alternative countries, such as Australia, France, and Romania, where grain prices are very high," said political science professor Najah al-Rais. "The strategic reserve of from five to six months will only mitigate the crisis in Egypt."

Russian Ambassador to Egypt Georgy Borisenko said in June that Moscow and Cairo had developed a system of supplies of Russian wheat to Egypt regardless of the Western sanctions. Whereas in previous years Egypt used to buy some six million tons of Russian wheat a year, or about a half of what it purchased on foreign markets, this year, this figure "may exceed eight million tons."

A package of documents geared to resolve the problem of food and fertilizer supplies on global markets was signed on July 22, 2022 in Istanbul and extended several times since then before ultimately expiring on July 17. Russia refused to extend it again because the part of the deal envisaging the removal of obstacles for Russian agricultural exports has never been implemented. Apart from that, Moscow has repeatedly stressed that the bulk of grain that was meant to be supplied to the poorest counties was shipped to Western countries. Russian presidential press secretary Dmitry Peskov said that Russia is ready to resurrect the deal but only after its part related to obligations to Moscow is fulfilled.