October 20, 2011

 

Egypt increases local wheat price by 8.6%

 

 

Egypt will raise the price it gives local farmers by 8.6% to about twice of what it pays for imported wheat, according to the local media on Wednesday (Oct 19).

 

Egypt, which imports about half of the 14 million tonnes of wheat it consumes annually, has long sought to encourage local production and reduce wheat imports.

 

The government will buy local wheat next year for a minimum EGP380 (US$63.57) per ardeb (140kg), up from EGP350 (US$58.55) this year, Social Solidarity Minister Gouda Abdel Khaleq said.

 

"Local wheat procurement prices for the new season will not be less than EGP380 (US$63.57) per ardeb," Abdel Khaleq said after a cabinet meeting on Tuesday (Oct 18).

 

This works out to US$454 per tonne, far above the US$250 per tonne it paid for foreign wheat at a tender month.

 

According to the media, Abdel Khaleq also said that the local price would be raised according to the level of pureness and will range between EGP380 (US$63.57) and EGP390 (US$65.24) per ardeb.

 

Egypt's main wheat buyer said on Sunday (Oct 15) the government was raising the local price to give an incentive to local farmers.

 

Egypt's wheat buying season begins around April.

 

"It is the price that has been set before the agriculture season started to allow farmers to prioritise wheat since it is much higher than the prices in the international market," said Nomani Nomani, vice chairman of the state-owned General Authority for Supply Commodities (GASC).

 

Egypt spent EGP33 billion (US$5.52 billion) on food subsidies in the fiscal year which ended on June 30, including wheat, oils, sugar and rice.

 

State finances have come under pressure from a sharp drop in economic growth after a popular uprising unseated the country's president in February.