The rise in global wheat prices, which reached record levels on Thursday, following the Russian military attack in Ukraine, will have direct impact on the Tunisian Subsidy Fund, Béchir Mestiri, president of Conect Agri told TAP.
Indeed, 80% of the soft wheat used in the manufacture of ordinary bread (subsidized product), are imported, particularly from Ukraine, he said.
Because of the escalation in Ukraine, the price of wheat, on Thursday, soared to €344, or about 1,112 dinars per tonne on Euronext, the main European stock exchange.
The impact on the subsidy fund is not limited to soft wheat, of which only 20% is produced in Tunisia, but also concerns ammonium nitrate, a subsidised fertiliser used in agriculture and imported from Russia, Mestiri said.
The Black Sea, through which a large part of the raw material imports from Russia and Ukraine transit, is currently a field of conflict; this will have an impact on the prices of these products for Tunisia and the rest of the world.
However, these repercussions depend on the duration of the conflict, stressed the president of Conect Agri.
As for the durum wheat used in the manufacture of pasta, the risks are limited given that 80% of consumption is ensured by local production.
To cope with the rise in soft wheat prices and ensure a good management of the current season, the CONECT manager recommended to follow the example of Egypt and to quickly launch a tender for the purchase of soft wheat.
However, this measure is confronted with a major obstacle, namely the limited storage capacity (about 3 months of consumption) of Tunisia in this field.
Even if the state can resort to renting warehouses, which do not quite meet the required storage standards, it is difficult to increase this storage capacity from 3 months to at least 6 months, in the absence of a strategy in this area, he pointed out.
At the end of September 2021, subsidy expenses went up 11% to 2.6 billion dinars, compared to the same period of 2020, according to the document of the Provisional Results of the State Budget Execution, published by the Ministry of Finance.
47% of these expenses are directed towards the subsidy of basic products (1.2 billion dinars), while the subsidy of fuels and transport, respectively, take up 35% and 17.5% of the total expenditure.
TAP has contacted the Grain Board and the Ministry of Agriculture several times without obtaining answers to its questions on the impact of the Ukrainian crisis on the grain sector in Tunisia.
Translated by Samir Ben Romdhane
Source: Tap News Agency