UPDATE 1-Russia to increase 2013/14 wheat shipments to Egypt
* Russia's Grain Union sees grain exports at 4 mln T in July-Aug
* Says Egypt's wheat imports likely to fall to 7-8 mln T
* Russia to boost wheat crop by 42 pct after drought
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MOSCOW, July 3 (Reuters) - Russia is likely to increase its exports of wheat to Egypt in the marketing year that started on July 1, despite political upheaval in the world's largest wheat importer, Russia's Grain Union said on Thursday.
Egypt will swear in an interim leader on Thursday after a tumultuous 24 hours during which the army ousted President Mohamed Mursi and vast crowds celebrated in Cairo and Alexandria, following clashes that cost 14 lives.
Bread has been one of the most sensitive issues for Egypt. State grain buyer the General Authority for Supply Commodities (GASC), together with private importers, normally obtains around 10 million tonnes of wheat a year.
"Due to political instability, Egypt is likely to slash imports to between 7 and 8 million tonnes this year," Arkady Zlochevsky, head of the Union, told a briefing in Moscow.
"Russia will account for half of Egypt's imports subject to its (Russia's) falling domestic wheat prices," he added. Russia supplied around 2.7 million tonnes of wheat to Egypt in 2012/13.
He expects all grain exported from Russia to total 2.5 million tonnes in August and 1.5 million tonnes in July.
Russia is expected to boost this year's wheat harvest by 42 percent to 54 million tonnes after last year's drought, according to the latest Reuters poll. It has threshed 7.7 million tonnes of wheat as of July 3.
(Reporting by Polina Devitt; Editing by Megan Davies and Jane Baird)