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					USW and USDA Ensure Access for U.S. Wheat to Egypt

U.S. wheat exports to Egypt reached 4.0 million metric tons (MMT) in crop year (June-May)
2011, valued at nearly $1.2 billion. Egypt was the top destination for U.S. wheat for the first time
since 2004. The critical need for stable supplies of subsidized baladi bread, vital to political
stability in Egypt, also creates a very price inelastic wheat market. In recent years, U.S. wheat
sales had fallen as Egypt imported lower-priced Russian wheat. Then, the Russian ban on wheat
exports that followed their 2010 drought created an opportunity for increased U.S. wheat sales.
Yet it was U.S. Wheat Associates (USW), FAS, APHIS, and FGIS that laid the groundwork and
removed barriers that enabled this trade growth. USW staff at its regional office in Cairo utilizes
Foreign Market Development program and Market Access Program funding to provide trade and
technical service and respond to issues quickly. For example, working with other FAS
cooperators, including the U.S. Grains Council and the United Soybean Board, USW co-
sponsors grain-buying seminars to help government and private buyers extract the most value
possible from U.S. grain import tenders. In April 2010, Egypt’s Central Administration for Plant
Quarantine (CAPQ) imposed a zero tolerance on Ambrosia (ragweed) seeds in wheat. This raised
the risk of rejection of shipments, so USW and FAS/Cairo, working with APHIS, intervened
with the Ministry of Trade and Industry (MOTI) to obtain a more favorable treatment for U.S.
wheat. The General Administration for Supply of Commodities (GASC)—Egypt’s state wheat
buyer that accounts for 60 percent of the 10 MMT in wheat imports)—removed the requirement
that USDA/APHIS certify that shipments are free of Ambrosia, which APHIS could not
legitimately certify, while leaving in place their general requirement for other origins. CAPQ
was also convinced to permit sieving of U.S. wheat shipments for Ambrosia when detected
instead of outright rejection. Yet such inter-governmental issues still created perceived risks for
private U.S. exporters who remained reluctant to bid on open wheat import tenders from Egypt.
USW responded by working with FAS and other agencies to arrange an Egyptian Government
Technical Team trip to the United States to demonstrate how counterpart U.S. government
agencies cooperate to assure export shipments meet importer quality specifications. Following
the Russian export ban, those timely efforts helped USW and FAS/Cairo reinforce the value of
the United States as a reliable supplier with MOTI and GASC. With information from USW and
other organizations, FAS/Cairo worked to resolve other issues including a fumigant residue
problem involving $45 million worth of U.S. wheat. These actions all greatly facilitated access to
the Egyptian market and GASC began regularly tendering for U.S. wheat including hard red
winter grown in the Plains states, soft red winter grown in several states mainly east of the
Mississippi River and soft white wheat grown in the Pacific Northwest. Total U.S. wheat sales to
Egypt in crop year 2011 represented a 2.2 MMT increase over the five-year average, valued at
$638 million. That compares to an annual approved program budget for wheat export
development in Egypt of about $250,000.

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