September 20, 2011

Egypt's wheat production to increase 16%

Egypt's local wheat output will increase by 16% to 8.4 million tonnes so the country should not need to ship in as much grain in 2011-12, according to a report by The Food and Agriculture Organisation (FAO).

Dow Jones stated that the Arab world's most populous nation is the world's largest wheat buyer, importing about 10 million tonnes of wheat in 2010-11. The grain is used to make subsidised bread for 14 million Egyptians who live below the poverty line.

Lower international wheat prices, which have slipped more than one fifth from their May highs as Russia reentered the world market and crop prospects improved, should also help cut Egypt's import costs, said the FAO.

"Given the good production prospects and cheaper wheat imports from Russia, the national food import bill for the current marketing year is anticipated to be lower than the previous year," said the FAO.

But a weak Egyptian pound and thousands of Libyan refugees that remain in the country following the conflict are likely to put pressure on the government's bill.

"The benefits of lower import prices may be partly offset by a weaker national currency," the FAO said.