Ukraine War Gives Egypt a Wheat Crisis Only China Can Solve

Irpin is also where Russian troops on March 13 opened fire on the car of U.S. video journalist Brent Renaud, killing him and wounding a colleague. (Image: AP)

Few non-combatant countries face a more direct hit to their living standards from Russia’s war in Ukraine than Egypt. Cheap bread is as central to the legitimacy of the modern Egyptian state as it was to Rome in the days when the empire was fed with the grain exports of the Nile delta. Attempts to reform the subsidy regime that ensures flatbread loaves can be bought for as little as a third of a cent each led to riots in 1977, while the strain of rising food prices also helped spark the country’s Arab Spring protests in 2011.

That makes the current conflict a political risk in North Africa. Egypt is the world’s biggest wheat importer, and close to half of the flour it consumed in 2020 came from Russia and Ukraine. While the government says it has sufficient stockpiles to see it through to the end of the year, it could rapidly become an existential issue if the war drags on and disrupts planting.

Lend me your ears

That’s an opportunity for China — which has hitherto tried to look the other way as the conflict in Ukraine raged — to buy itself a little soft power by helping out a nation that’s seeking closer ties. Whether it does or not will determine the extent to which Beijing is prepared to wield carrots as well as sticks in world affairs.

China has quietly been building up an immense pile of grains in recent years. Ending stocks of wheat nearly doubled between 2014 and 2019 from 76 million metric tons to 150 million tons, to the point where the country now has about half of the global total. Beijing has enough warehoused wheat to meet the demand for 18 months, officials said last year.

Daily Bread That puts the disruptions caused by Russia’s war in Ukraine in some perspective. The loss of about 4 million tons of exports from Ukraine this marketing year forecast by the U.S. Department of Agriculture will largely be compensated by the same volume of additional exports from India and Australia, where ample rains have produced bumper crops. Egypt will only need an extra 100,000 tons if it cuts back on exports, as the government promised to do last week.

It would be extraordinarily easy for Beijing to fill this gap from its own burgeoning stockpiles — especially as a loosening of trade rules agreed on the eve of Moscow’s Ukraine invasion should allow more Russian grain into the country. Plugging that shortfall would use up the equivalent of about six hours of Chinese wheat consumption. The question is whether Beijing is prepared to countenance such a move.

Years of Plenty Egypt itself carries little blame for the situation. Its own farming sector is still extraordinarily efficient, with yields that match those of Western Europe and far exceed ones found in the U.S., Russia, and Ukraine. The problem is that the scant ribbon of agricultural land on the banks and delta of the Nile is insufficient to feed a population that has doubled since the mid-1980s to more than 100 million people. Subsidies once ate up as much as 15% of the national budget, but that’s declined to less than 5% these days and President Abdel Fattah el-Sisi last year promised further reforms to bring prices in line with production costs.

Faced with cooling relations in Washington, Sisi has made strenuous efforts to improve relations with Beijing in recent years. Egypt arrested and deported Uyghur Muslims in a crackdown beginning in 2017 and wrote to the United Nations in support of China’s policy in Xinjiang in 2019. Those actions may have been morally repugnant, but none of them were easy moves, politically. Sisi even turned up for the opening ceremony of the Beijing Winter Olympics last month, despite Egypt not fielding any athletes in the event.

With the strengthening of the NATO coalition since the start of the Ukraine war, Beijing should have strong interests in cultivating its relationship with Egypt, a growing authoritarian middle power that controls a vital trade route and a pivotal position in the Middle East.

Golden Hoard

For more than a century, the U.S. has used exports of its ample food surpluses as a crucial element of its diplomacy around the world. The times when that policy has failed have mostly been when Washington showed stinginess rather than largesse. Right now, though, China’s stockpiles mean it has the larger surplus, and the greater need to bolster its international alliances.

The most vital question for President Xi Jinping may be how he handles diplomacy between Kyiv, Moscow, and Washington — but how he treats Cairo will be crucial, too. The countries that will cement the strongest international ties in a century of growing food insecurity are those that are most prepared to share their bounty with their allies. China’s international standing now looks less steady than it has in years. If it wants to win more friends on the world stage, showing a little generosity would be a good way to start.