The Egyptian government has bought 600,000 tons more of local wheat than last year at a cost of EL1.8 billion, an Egyptian official said.
The Minister of Supply and Local Trade, Hassan Khedr, said the ministry bought the 600,000 tons of wheat from local farmers between May 15 and August 25. It was 600,000 tons more than the government bought during the same period last year.
Khedr, who spoke to reporters on the sidelines of the September 4 Euro money conference on emerging Arab markets held in Cairo, said the ministry bought 2.037 million metric tons of wheat for EL1.8 billion.
Egypt consumes around 12 million tons of wheat each year. Wheat is a subsidized commodity in Egypt. An attempt by former President Anwar Sadat to raise bread prices in 1978 resulted in serious riots in Cairo, and the government has kept prices low ever since.
The General Authority for Supply Commodities (GASC), the ministry's purchasing and distribution division, will store the wheat.
GASC policy dictates that an average of 4.5 million metric tons of wheat be imported a year, Khedr said.
"This will be our policy for the next 10 years if local wheat growers keep producing 6.5 million tons of wheat," Khedr said.
Khedr supposed that GASC would continue importing the commodity from its three main suppliers, the US, France and Australia.
He said in the future, Egypt might also buy wheat from Canada. Khedr said an international tender for fifty silos with 12 million tons of storage capacity was awaiting cabinet approval.
"These new silos will help prevent leakage from the ones we have now," Khedr said. "We loose some 10 percent, or around 1.5 million tons, of all our wheat each year due to leakage."
The government, which usually allots EL1.5 billion a year to buying wheat from local farmers, paid an additional EL700 million in May to acquire a surplus of the staple in an effort to reduce its reliance on imports.
Government sources said the state would increase the amount of wheat bought locally to 2.5 million tons this year, compared to 2.1 million tons in 1999. Khedr said Egypt has enough wheat in its reserves to last until mid-March 2001.
According to a recent grain-market report published by the International Grains Council, Egypt is forecast to import 6.7 million tons of wheat during the 2000-2001 marketing year.
The GASC's purchases account for around 5.5 million tons of the nearly 7 million tons that Egypt imports annually. Private buyers and the state-owned Food Industries Holding Company make up the rest. –(Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com )