Egypt buys 2mn tonnes of local wheat, price unchanged

CAIRO: Egypt, the world's biggest wheat importer, has bought around 2 million tonnes of local wheat since last month, the Supplies Ministry said on Wednesday, about half its target this year in a procurement season that lasts until mid-July.

The price paid to local farmers per Egyptian ardeb, the equivalent of around 150 kg, has been 420 Egyptian pounds ($59.53), Supplies Minister Khaled Hanafi said in an emailed ministry statement.

The Supplies Ministry is in charge of wheat procurement. Last year the government raised the fixed price per ardeb to 420 pounds from 400 pounds, aiming to encourage farmers to grow more.

The local price exceeds the price Egypt pays in the international market by more than $100 per tonne.

On Tuesday the Finance Ministry posted a statement on its Facebook page saying the price had risen to 500 Egyptian pounds.

"The price never changed, It is the same at 420 per ardeb," Mamdouh Abdel Fattah, vice chairman of the General Authority of Supply Commodities (GASC), told Reuters.

Egypt wants to boost domestic production in an effort to cut its import bill. Each year the state and private buyers purchase around 10 million tonnes from abroad. Egypt estimates its total local wheat crop this year at around 9 million tonnes, of which the government is aiming to buy 4 million.

Traders surveyed in a Reuters poll estimated this year's crop at around 7 million tonnes, in line with the previous harvest.

Private traders' estimates for the local crop are consistently below government estimates.

Agriculture Minister Ayman Abou Hadid said on May 11 that Egypt had bought more than 1.2 million tonnes of local wheat.

The government also is seeking to reduce its roughly $5 billion a year expenditure on subsidies for bread, which hit its budget and an economy that is already suffering from more than three years of political turmoil following the 2011 uprising.

Fearing public protest, one cash-strapped government after another has failed to tackle a reform of the bread supply chain, which provides loaves for the equivalent of 1 US cent each, after decades of corruption and waste.

Hanafi said earlier this month that statistics gathered from the first stage of a new, reformed bread subsidy programme in the Suez Canal city of Port Said showed a marked drop in consumption.