Trade dependency and Resilience: an analysis of Egypt’s Wheat import dynamics during the Russia-Ukraine War

What the paper says

Purpose Provided that Egypt is the world’s largest wheat importer, the conflict between its primary suppliers presents significant challenges to its trade stability and food security. This paper aims to investigate the impacts of the Russia–Ukraine (RU) war on Egypt’s trade dynamics, with a particular focus on wheat imports over the period 1995–2023. Design/methodology/approach The study uses the Fully Modified Ordinary Least Squares (FMOLS) model to estimate the relationship between macroeconomic variables and Egypt’s trade performance, as well as agricultural determinants and wheat import dynamics. Findings The empirical results show that Egypt’s GDP growth rate and its exchange rate have negative and statistically significant impacts on both the growth rate of imports and total trade with Russia and Ukraine. Conversely, Egypt’s inflation and the GDP of Russia and Ukraine show a positive and significant effect on Egypt’s imports and total trade. This indicates Egypt’s vulnerability to both domestic inflationary pressures and foreign economic activity. Importantly, the inclusion of a war dummy variable capturing the RU war shows a negative and significant impact on Egypt’s total trade and wheat imports, underscoring the geopolitical shock’s disruptive effects. Research limitations/implications The findings offer critical insights for policymakers to enhance trade resilience, diversify import sources and strengthen domestic agricultural capacity in the wake of global trade disruptions. Practical implications The findings imply that Egypt should implement comprehensive policy reforms in wheat pricing mechanisms, introduce targeted incentives to enhance private sector efficiency in agricultural production, and foster the adoption of innovative and sustainable farming practices. Social implications Social implications extend to reducing food insecurity in Egypt, containing food inflation through improved supply stability, and advancing inclusive growth by ensuring equitable access to affordable staple commodities. Originality/value This study offers a distinctive contribution by examining Egypt’s short-term adaptive responses to the Russia–Ukraine war–a period characterized by exceptional disruption in global wheat markets. It provides empirical insights into how Egypt, an import-dependent economy navigated concurrent external shocks, including trade blockages, logistical constraints, and unprecedented price surges, thereby revealing the mechanisms underpinning trade resilience under crisis conditions.