Egypt, the world's largest wheat importer, will develop a new grain storage system which it hopes will reduce by a quarter the amount of wheat wasted annually and ultimately improve the quality of subsidised bread, supply minister Khaled Hanafy announced on Thursday.
The agreement with Blumberg Grain is to replace 93 local wheat barns with food security technology and systems at a cost of $28 million (LE200 million).
The new storage system will save Egypt an estimated LE1 billion annually, the US-based global food security company said.
"When we look at (barns) what we see is 40 percent of harvest loss. This is due to crocks, rodents, pigeons and other pests that unfortunately attack the grains," David Blumberg, West Africa CEO at Blumberg, said at the press conference.
The Army Engineering Authority, Egyptian Holding Company for Silos and Storage and the supply ministry are collaborating with Blumberg Grain to complete the project by the next harvest season in April.
In the harvest season the Egyptian government buys wheat from local farmers estimated to reach 3.5 million tonnes in fiscal year 2014-15 to be used in subsidised bread, the main staple of the Egyptian diet.
“Wheat is stored in open air, and on dirt, left for months for birds and rodents. This wheat is then used to make bread,” Hanafy said.
Flour is produced by grinding wheat in mills with all the dirt, planktons and pebbles, Hanafy added.
In the new system wheat will be screened, cleaned, classified and segregated to be sold at the higher rates it deserves, Blumberg said.
Egypt is estimated to import 4.3 million tonnes of wheat in the current fiscal year to sustain the nationwide bread subsidy programme.
Blumberg Grain is also considering Egypt as a location to build a plant for manufacturing and exporting food security equipment for MENA.
The manufacturing plant would generate $1 billion in the first year and $7 billion over a period of five years.