Egypt, a significant buyer of essential commodities,  has recently signed an agreement with UAE to import and supply wheat to the local market, according to an official statement.

The deal was signed between Egypt and both the UAE-based agribusiness Al Dahra and the Abu Dhabi Exports Office (ADEX) at an amount of $500 million for five years.

The agreement, worth $100 million per year, will provide Egypt with imported milling wheat “at competitive prices”. Al Dahra will supply Egypt with imported wheat this year.

Egypt’s currency has dropped by about 50% against the dollar and official headline inflation has increased to an all-time high of 36.5%, according to media reports.

“The low-cost financing package from ADEX helps us procure high-quality wheat at the lowest cost financing available, with comfortable payment terms,” Egypt’s supply minister Ali Moselhy said in a statement.

Many recent wheat purchases have been made with loans from the International Islamic Trade Finance Corporation (ITFC), which last year doubled a credit facility extended to Egypt to $6 billion, and from the World Bank, which funded wheat imports earlier this year.

Funding for subsidies on food, mostly bread, will rise 41.9% to $4.1 billion in the fiscal year from July 2023 to June 2024, according to the finance ministry.

The Emirati company already supplies the government with locally produced wheat via its Egyptian subsidiary, which farms 28,000 hectares in Egypt.