Egypt riots may hurt Idaho wheat sales

Feb 4 2011 - 12:24pm

Though the gunfire and protests of Egypt are happening more than 6,500 miles away, the effects may be felt on the wheat fields of Idaho and Washington.

Sam White, the chief operating officer of Pacific Northwest Farmers Cooperative, said changes in the Egyptian government could result in anti-American sentiment, which would stop wheat imports from traveling to Egyptian ports. As one of the largest grain exporting areas in the nation, this would cut off many local farmers from buyers.

"We want that Egyptian demand, it's a vital part of the market," White said. "They buy a lot of wheat from the world, so it is vital that they keep buying it."

Egypt imports 34 percent of the wheat it consumes, about 15 percent of the world market, according to a Washington Grain Commission press release.

Though Egypt also buys from Black Sea and Australian markets, it has been a consumer of Northwestern U.S. producers for the past 10 years. Already this buying year -- which runs from June to May -- Washington, Oregon and Idaho farmers have exported more than 850,000 metric tons of soft white wheat worth about $200 million to Egypt and nearby Yemen, which also has been facing political unrest.

"So far this marketing year ... the two countries alone have bought about 20 percent of our exports," said Tom Mick, the chief executive of the Washington Grain Commission.

Local grain markets rely almost totally on exporting their goods. About 80 percent to 90 percent of area grain is exported. While there is a high demand for American-grown wheat globally, due to flooded wheat fields in Australia, draught in the Black Sea region and a wet planting season in Canada, the loss of Egyptian demand is not good for producers, White said.

The worse case scenario of the current riots would have about the same affects of a political overhaul in Iran in 1979. Following a revolution, Iran's government changed to new anti-American leadership. In a matter of days, the country went from buying about million tons of Northwest-produced soft white wheat to rejecting all American wheat imports.

Anti-American sentiment in Egypt could lead to an even more devastating outcome, however, because of the nation's control of the Suez Canal. Should Egypt cut off American imports, the north African and Arabian markets could also be cut off from American exporters.

Both Mick and White said such a result is unlikely.

"It is something that we're watching on a daily basis, but there's not a lot we can do about it," White said. "There is speculation that things could change once that happens, that would be the time that the wheat commissions would step in and educate the regime change on how we do business and how we've done business in the past."

Unrest in Egypt is not likely to affect other major harvests on the Palouse such as garbanzo beans. Max Hinrichs, the director of international sales at Hinrichs Trading Company in Pullman, said Egypt is not a major buyer of lentils and garbanzo beans produced locally.

"There's times we export to Alexandria, to the port there, but we just don't happen to be doing that right now," Hinrichs said. "Most of the stuff that we're doing is going into Italy and Spain and countries that are more developed."

Hinrichs annually exports about 12,000 tons of beans and peas internationally.

Sarah Mason can be reached at (208) 882-5561, ext. 234, or by e-mail to smasondnews.com.

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