Egypt withdraws from UN grain treaty
Egypt who are one of the world’s largest wheat importers, have given notice that it will be withdrawing at the end of June from a decades-old U.N grains treaty, causing dismay among some other signatories to the convention.
Egypt’s departure from the multinational Grains Trade Convention (GTC), which promotes market transparency to further trade cooperation, follows a period of turmoil in grains markets linked to the war in Ukraine and concerns about global food security.
The African country signed the GTC, the only international treaty covering trade in grains, at its inception in 1995, and has been a member of the council that governs it since 1949. In February it submitted a request to withdraw with effect from June 30, 2023.
Egypt’s foreign ministry told Reuters in a statement that the decision was made after an assessment by the ministries of supply and trade concluded that Egypt’s membership in the council delivered “no added value”.
Other signatories to the GTC include major grain importers and exporters such as the United States and the European Union.
Two sources familiar with the matter, who asked to remain anonymous, told Reuters that Egypt owed the IGC membership fees. The foreign ministry did not respond to a question about fees.
The war in Ukraine disrupted Egypt’s wheat purchases last year and the government held talks with countries including India as it tried to diversify from Black Sea supplies.
The economic impact of the war has also exacerbated a foreign currency shortage in Egypt, leading to a slowdown in imports, a backlog of goods in ports, and a $3 billion financial support package from the IMF.
In January, Egypt’s government instructed ministries to curb non-essential spending until the end of the fiscal year.
Writing by Tersoo Nicholas