By Mohamed Abdel Monsef
Egypt’s wheat imports were not affected by the US and EU economic restriction on Russia’s grain exports, according to Abdel-Salam Gomaa, President of the Agricultural Professions Syndicate.
In statements to Daily News Egypt, he said the global production of wheat this year amounts to 775m tonnes. He added that the amount of surplus in producing countries reached 120m tonnes, for export to other countries. He pointed to the retreat in global demand on wheat after China’s success in achieving self-sufficiency, as the largest importer of wheat with a rate of 15.5m tonnes per year.
He also pointed to the transition of former Soviet countries from importing countries of about 26m tonnes of wheat, to exporting countries. This came in addition to India’s self-sufficiency, and he added that these countries were the main consumers of wheat. However, he warned against the possibility of a world grain stock decline as a result of Brazil, USA, and other countries’ usage of wheat in producing biofuel.
Gomaa stressed that local production covers the country’s consumption for six to seven months, and that the continuity of the importing process year-round is essential for preserving the country’s strategic reserve. He also noted the presence of trade surplus in wheat year-round, as a result of time differences in its growing and reaping from one country to another.
Gomaa stated that global wheat prices were stable since the restrictions on Russia, and the price rates are steady. He added that Egypt imports three types of wheat, the first of which is high-quality wheat containing 14% proteins and is worth $400 per tonne. Most of it is supplied to pasta factories. The second type of wheat contains 12% proteins and is worth $300 per tonne, supplied to sweets and fine bread factories. The third contains 8%, amounting to $150 to $170 per tonne, and is supplied to subsidised bread factories.
Gomaa declared that Egypt’s wheat requirements have declined from 16.3m tonnes to 14m tonnes, following efforts by the government to lower the citizen’s average annual consumption of wheat from 188 to 150 kg. He pointed to the local wheat production in the 2014 season, which amounted to 9m tonnes, while imports were at 6m tonnes.
Gomaa expects that imports in 2015 will reach 4m to 5m tonnes as a result of cultivating 3.5m acres in the 2014/2015 season, and that production will reach 10m tonnes. Gomaa affirmed that there is a chance to tighten the gap between production and consumption to 2m tonnes if the government succeeds in lowering individual consumption to 120 kg annually.
As for the reason behind lowering the rate of individual consumption of wheat, Gomaa said Minister of Supply and Internal Trade Khaled Hanafy plans to sell flour to bakeries at a free rate. This would be at EGP 3,000 per tonne, instead of supplying it at a subsidised price of EGP 160 per tonne. It would also link distribution of subsidised bread to the food card, on the condition that an individual’s share of bread does not exceed 5 loaves of bread a day. He stated that this helps control fraud in the manufacturing of subsidised wheat, a method used by bakery owners to sell bread as fodder to poultry farms and animal production. It amounts to EGP 1.5 per kg of wheat, when 1 kg of wheat was sold for EGP 3.
He added that providing hard currency for the General Authority for Supply Commodities (GASC) to import wheat, and limiting import procedures to government authorities will restrict misuse of wheat from other entities. The latter increased consumption rates through manipulating the distribution system to raise its imports at the expense of the people.