Nevertheless, some economies have already begun to feel the pinch. And perhaps none moreacutely than Egypt's wheat market. Egypt's Wheat Worries In July, a monumentally severe heat wave struck much of Russia, inciting widespread fires anddroughts, and devastating the country's wheat crop. In the wake of the disaster, Russiaimplemented an export ban on wheat in the hopes of securing a healthy domestic supply throughthe end of the year. The news came as something of an alarm to Egypt, the world's largest wheat importer andscheduled recipient of 540,000 tons of Russian wheat, due for delivery by the end of this year.With this order suddenly cancelled, Egypt found itself scrambling to diversify its import portfolio tomake up for its Moscow-sized trade gap. Eventually, the US, France and a host of foreign suppliers stepped up to fill the void, and, in mid-September, Egyptian trade minister Rachid Mohamed Rachid confirmed that the country hadsecured enough supplies of wheat to avoid any immediate shortages. That should come as a major relief to the average Egyptian consumer, who, according to thecountry's General Authority for Supply Commodities (GASC), consumes about 180 kg of flour peryear. This import diversion will also ease the concerns of Egypt's politicians, who were no doubtskittish after the recent death of a 25-year-old in a bread queue revived memories of 2008, whensimilar violence broke out among protesters and police in the city of Mahalla. Ultimately, though, this game of mercantile musical chairs is nothing more than a stopgapmeasure that masks a more insidious, if less obvious malady-Egypt's wheat subsidy program. Sub-par Subsidies Each year, the Egyptian government devotes some $3 billion to food subsidies-a third of whichgoes to buoying the country's bread supply. Under this system, the state procures wheat fromforeign suppliers at a fixed price. In a country where roughly 16 million inhabitants are classified aspoor, guaranteeing a constant food supply certainly makes political sense. There's an economic logic to the country's subsidies as well. By devoting so much capital to thewheat market, Egyptian authorities are essentially attempting to protect the domestic market fromthe often violently sinusoidal tremors that can rattle international grain prices. In September, when the GASC announced that it had secured sufficient imports to feed theEgyptian population, deputy chairman Noamani Nasr Noamani pointed out that the governmenthad also secured enough money to increase the budget for its wheat subsidies. This increasedbudget, Noamani claimed, means "the Egyptian consumer and the Egyptian citizen will not feel thepain of the increase of prices globally." The problem for Egypt though, is that today's market conditions couldn't be less favorable to sucha massive-and often misdirected-subsidy program.