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Egypt and Ukraine work on gas-for-wheat deal

High grain prices have strained Cairo's bread subsidy system resulting in riots due to shortages

  • Reuters
  • Published: 23:12 September 5, 2008
  • Gulf News

Cairo: Egypt and Ukraine are negotiating a gas-for-wheat trade deal, Egypt's state news agency said yesterday, quoting a Ukrainian diplomat.

"The governments of the two countries are negotiating now to reach a deal to exchange Ukrainian wheat for Egyptian natural gas which will be exported through a pipeline which passes through Syria and Turkey to the Balkans," Middle East News Agency quoted Valerie Grygorash, head of Ukraine's trade delegation in Egypt, as saying.

An official at the Ukrainian embassy could not immediately comment on the report. The news agency did not give further details.

High wheat prices have strained Egypt's bread subsidy system, and riots have erupted this year over bread shortages. Egypt, one of the world's largest wheat importers, often buys wheat from Ukraine. It purchased 52,500 tonnes of Ukrainian wheat in a tender this week.

Ukraine faces rising prices for gas from Russia, through which half of its gas is imported.

Russia halted gas flows to Ukraine for several days in a pricing dispute in early 2006 which had a knock-on effect for gas passing through Ukraine and on to European customers.

Egypt had proposed in April to grow wheat in Sudan to meet the needs of Egyptian consumers, and then in May identified an area of about 2 million acres on the Sudan border where the two countries could grow wheat in a joint project.

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