Egypt wheat reserves at 2.6 months supply


Egypt, the world's largest importer of the grain, has said it aims to buy about 4-4.5 million tonnes of wheat from farmers this season while cracking down on smuggling that has cost the country hundreds of millions of dollars in recent years.

Egypt's Minister of Supply Ali Moselhy said that there was about 2.6 months worth of wheat in Egypt's strategic reserves.

Moselhy put that procurement figure a bit lower at Monday's (April 24) news conference.

"Like I said, we have [sufficient reserves] for 2.6 months, and we have about 2 million tonnes now, or 1.8 million tonnes, on our ground, but as we enter the season, we always ensure that we have 3-4 months worth of reserves during the season," he said, standing in a wheat field in Beni Suef, an agricultural province about 100 km south of Cairo.

Egypt's local wheat harvest begins around mid-April and runs through July.

The North African country has been tightening its policing local wheat procurement to prevent fraud.

More than 2 million of the 5 million tonnes of wheat bought by the government last year may have existed only on paper, according to grain industry experts and lawmakers who investigated the matter.

Moselhy said state grain buyer GASC would continue to import during the harvest aiming to increase strategic reserves to six months.

He said the 2.6 month figure did not include quantities of wheat contracted for by GASC but which have not yet arrived and it is unclear how much remains outstanding.

Higher-than-usual bread consumption

Government figures for reserves have in the past often included wheat not yet in the country, a tactic traders say inflates the country's level of strategic reserves.

Moselhy added that GASC's monthly consumption of wheat, which it uses to supply the country's sprawling bread subsidy programme, stood at about 800,000 tonnes per month.

"The harvest this year, hopefully, will not be less than last year's, if not more. This year, we planted about 3.1 million feddans, which will produce about 9 million tonnes, so the harvest will be like last year, and we will procure to the government about 4 million tonnes, and the farmers store in their homes about another 4 million," said Hussein Abdelrahman, the head of the farmers syndicate.

In the months leading up to the wheat harvest Egypt's GASC has been buying wheat from abroad at a breakneck clip, which traders have attributed to higher-than-usual bread consumption by Egyptians hit by soaring inflation.

GASC purchased about 5.6 million tonnes of wheat during the 2016-17 season which ends with the start of the local harvest, a nearly 25% leap from the roughly 4.5 million purchased last year, according to Reuters data.


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