A farmer holds out grains of wheat in his hands during a harvest on a field in the El-Menoufia governorate, about 9.94 km (58 miles) north of Cairo, Egypt, April 23, 2013 (Photo: Reuters).
Egypt's trade balance deficit reached LE21.6 billion ($3.04 billion) in January 2014, state-run statistical body CAPMAS reported on Thursday.
The figure represented a 2.7 percent drop compared to the same month in 2013, when the deficit stood at LE22.2 billion ($3.12 billion).
The report showed that the decline in the deficit is driven by a fall in imports, mainly wheat, petroleum products and pharmaceutical products.
The value of imports shrank by 3.4 percent – that is, around LE1.32 billion ($185.5 million) – to reach LE37.03 billion ($5.2 billion).
In January, Egypt's wheat imports fell to 55,000 tons, down from 115,000 tons in the same period a year earlier, which was considerably below January 2012's wheat imports amounting to 450,000 tons.
For the past few years, as Egypt's currency value and reserves have suffered several blows, the government has been trying to cut down on wheat imports.
To do so, the government has encouraged local farmers to grow wheat. As a result, the surface area planted with wheat this year amounts to 3.5 million feddans, a 100,000 feddan increase on last year. Productivity is also expected to increase to 2.8 tons per feddan – up from 2.7 tons last year, says a government official.
The value of Egypt's exports in January 2014 declined 4.4 percent (around LE710 million/$99.8 million) from the previous year, recording LE15.44 billion ($2.17 billion).
Among the main products to suffer a drop in exports, according to CAPMAS, were petroleum products, oranges, tiles and sanitary fixtures, articles of plastics and carbon.
At the end of January 2014, the dollar traded at LE6.9748.
On Wednesday the central bank held an exceptional foreign currency auction where it sold $1.1 billion in order to clear pending food backlogs.
Banks and traders told Reuters that Egypt's tight finances have been hindering payments for food commodities.
Meantime, food imports ahead of Ramadan, the month in which Muslims fast from dawn to dusk, are expected to increase.
Egypt’s foreign reserves currently stand at $17.489 billion, which is a little higher than its value in January of $17.105 billion.