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Egypt buys 290,000 tonnes of American wheat: Minister

The latest purchase is expected to cover the country's needs until mid-May

Ahram Online , Wednesday 25 Feb 2015
wheat
A farmer harvests wheat on a field in the El-Menoufia governorate, about 9.94 km (58 miles) north of Cairo (Photo: Reuters)
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Egypt has signed contracts for 290,000 tonnes of American wheat, at an average price of $273.11 per tonne, to be delivered starting 15 April for a period of 10 days, supplies minister Khaled Hanafi announced on Friday.

The latest purchase will ensure that the country's needs are met until mid-May 2015, he said.

The government, which runs a bread subsidy programme for some 69 million Egyptians, is the world's number one importer of wheat.

Earlier this year, in order to reduce government spending on wheat, the Egyptian authorities launched a new smart-card scheme for subsidised bread.

The scheme seeks to improve on a former programme in which the government provided bakers with subsidised flour to produce subsidised bread for consumers, but bakers instead often sold most of it off for profit to businesses, such as restaurants, leaving little flour for the subsidised bread for which it was intended.

In the new scheme, the government sells flour to bakers at a non-subsidised market price, according to which a loaf of bread costs 0.35 EGP. Consumers pay a subsidised rate of 0.05 EGP per loaf with their smart cards. Bakers then only later claim back the difference of 0.30 EGP from the government, according to the electronic records of their sales.

Consumers are entitled to fives loaves of bread per person per day, and they can exchange part of their bread ration for other foodstuffs and non-food items, such as detergent, that are also government subsidised.

Food subsidies account for 4 percent of total expenditure in the 2014/2015 budget, compared to 4.2 percent in the previous year's budget.

The new smart card system, which is being introduced gradually throughout the country, currently covers over a dozen of Egypt's 27 governorates, including Cairo, Giza, and Alexandria, Egypt's second largest city.

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