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The New Egypt

American wheat in the Middle East

Jeff Tyler Apr 26, 2011
The New Egypt

American wheat in the Middle East

Jeff Tyler Apr 26, 2011

Kai Ryssdal: The protests in the Middle East have brought, in some cases, sharp political change. But some of the economic fundamentals have been slower to adapt. Others aren’t ever going to change.

Starting with this one: people gotta eat. This week, we’re going to look at the role of American businesses in the changing economics of the Middle East, and we’re going to start in the farm country of the Pacific Northwest with Marketplace’s Jeff Tyler.

Jeff Tyler: The tractor gets a tune-up as Randy Suess gets ready to plant his soft-white wheat. He’s a third-generation farmer with about 1,300 acres of rolling hills south of Spokane, Wash. It’s a long way from Cairo. But the relationship is closer than you might think.

Randy Suess: When you look at the numbers for this year, Egypt right now is the number one buyer of all U.S. wheat.

Foreign markets are absolutely vital for farmers like Suess.

Suess: In the Pacific Northwest, we have to find a home for 90 percent of it. There’s only 10 percent domestic market here.

Egypt is a swing buyer — they turn to American suppliers when they can’t find cheaper wheat elsewhere. But he says another Arab country is a more consistent buyer.

Suess: You wouldn’t think that Yemen would end up buying a lot of wheat from us when you look at logistically how far away it is. But they’ve traditionally been the number four buyer of our soft-white wheat over many years.

Suess has visited Yemen on trade missions. He recently canceled another trip because of the current unrest. But together, Yemen and Egypt buy about 22 percent of the wheat from the Pacific Northwest. Could new governments in those countries hurt business?

Suess: We have some definite fears there.

He remembers what happened after the Iranian revolution.

Suess: Some years, up to 30 percent of our wheat was going into that country. That went from that to zero.

A boycott is considered unlikely in Egypt, something that becomes clear if you visit a government bakery in Cairo. Men put dough in a big machine that looks like a relic from the Industrial Revolution. Government bakeries sell pita bread for about a penny a piece — far below cost.

It’s a dietary staple for most Egyptians, like 30-year-old Amani.

Amani: Every day, every day, every day. We Egyptians can’t live without bread.

Dick Prior: The word for bread over here in Egypt, the Arabic word that they use, is ‘aish.’ And ‘aish’ in Arabic means ‘life.’ And that’s how important bread is.

Dick Prior is the regional trade representative for U.S. Wheat Associates in Cairo. He says the government bakeries stayed open even during the height of Egypt’s revolution.

Prior: They were working 24 hours a day, under a lot of pressure. But they made sure that they had the bread out to the people.

Is there any chance that a new government would end bread subsidies?

Prior: If the government stopped subsidizing wheat, they would have a lot of riots. I mean, it would make Tahrir Square look kind of small.

In the past, there have been riots when the price of bread increased in Egypt. So even if new regimes aren’t close allies of the U.S., they need wheat to help secure their own political stability.

Prior: Wheat is so dear to all the whole Middle East, I don’t think very much is going to change no matter what kinds of governments come out in all these areas where they’ve had revolutions. I think we’re still going to be able to do business out here.

Instead of shrinking, opportunities appear to be growing for American farmers. Prior says Iran has recently made reforms that re-open a market for U.S. wheat.

I’m Jeff Tyler for Marketplace.

Ryssdal: Julia Simon helped produce our story from Cairo. Tomorrow, another American export to the Middle East that’s rising in value: political consultants.

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