November 25, 2010

 

Egypt eyes Sudan for wheat needs

 

 

Egypt has approached its impoverished southern neighbor, Sudan, for use of agricultural land as the world's biggest wheat importer tries to meet domestic food supply needs and appease a rapidly growing population over constant price hikes.

 

With a summer drought in Russia that resulted in higher grain prices still fresh in the government's mind, Egyptian officials in September revived a 30-year-old agreement with Sudan that promotes private corporations to plant wheat in northern Sudan. The deal brings Egypt into a growing list of Arab nations that have approached Africa as a new breadbasket.

 

"We are facing a shortage of agricultural commodities internationally," said Ayman Abou Hadid, chairman of the state-run Agricultural Research Centre. Under the deal, the Egyptian government offers investors with incentive for irrigation and infrastructure. However, production is up to the private companies, he said.

 

"The government is not going to participate," Hadid said.

 

The deal shows the most recent attempt by the government to cater to future needs in the Arab world's most populous nation but the push has obvious political overtones.

 

An unusually hot summer in Egypt caused vegetable prices to rise dramatically though those gains were connected to a decision by the government to export tomatoes, leaving the local market short.

 

Fears of inflations in food prices had already happened before Russia decided to stop grain exports for the rest of the year after a summer drought destroyed a third of its yearly harvest. Over the course of the year, meat prices seesawed, more than doubling before retreating slightly.

 

The same gains were seen in more basic goods as well, leading to a series of protests that came at a particularly critical time for the government of President Hosni Mubarak, who has ruled the country for the past 30 years.

 

The deal also provides a potential boon for Egypt, which remains at odds with several other nations that share the Nile River, over water quotas. Abu Hadid said water used to irrigate wheat crops in Sudan would come from that nation's allotment, not Egypt's.

 

The new production would likely be enough to meet Egypt's rate of population growth, said Abdolreza Abbassian, a senior economist at the UN's Food and Agriculture Organization (FAO).

 

It could also offer a needed cash infusion for Sudan's struggling economy, which has been destroyed by the country's a 21-year civil war between Sudan's mostly Muslim north and predominantly animist and Christian south.

 

"Sudan has a huge potential," he said. "There are so many positive aspects as long as some code of conduct is respected."

 

Egypt is not the only country which is tapping Sudan's vast land base for crops. Saudi Arabia, the United Arab Emirates, and Qatar have also turned to the country for food.

 

Some experts argue, however, that the deal will not do much for Sudan which has its own food worries, along with political problems.

 

Nader Noureddin, a soil and water expert at Cairo University's College of Agriculture, said wheat production in Sudan's northern desert would need a big amount of water and would do little to contribute the Egypt's domestic need for the grain.

 

"They need it (wheat) much more than Egypt," he said. "This is their land."

 

Additionally, any private Egyptian investment will not assist Sudanese farmers as the companies that venture in will be concentrating on profit, not whether the war-ravaged nation can support itself, said Noureddin.

 

The criticism is dismissed by officials, however, who argued that the new wheat production will be traded on the open market and foreign investment will help improve infrastructure.

 

"Any African country that can afford to grow more food, that is better for everyone," Hadid said.