After months of spiralling increases, the price of rice in Egypt is now expected to cool down.
Observers say that the fact that the local rice harvest season is taking place in August and September may eventually lead to decreases in the price of this strategic crop in the Egyptian market, especially since there has been an increase in the amount of land planted with rice this season by 25 per cent.
Mustafa Al-Naggari, chair of the Rice Committee at the Egyptian Agricultural Export Council, said a ton of rice before de-husking and milling currently costs between LE15,000 and LE16,500. It ranges between LE22,000 and LE24,000 after the milling process, he added.
An unpackaged kg of rice should range from LE22 to LE24 when sold to the consumer, while a packaged kg should be priced at LE27 to LE28, he noted. A kg of premium rice is now selling for over LE35 a kg for the highest-quality brands and at LE28 to LE30 for those of lower quality.
Ragab Shehata, head of the Rice Division at the Federation of Egyptian Chambers of Commerce, earlier stated that the price of rice will drop due to greater amounts at the mills.
He expects a kg of rice to be sold for no more than LE25.
A kg of rice is priced at between LE20 and LE23 at the mills depending on the percentage of broken kernels. He added that the difference between the price at the mills and on the consumer market is because of the monopolising practices of some companies.
Earlier this week, a number of Heliopolis supermarkets were found to be selling rice for between LE28 and LE40 a kg depending on quality.
Shehata said that some producers take advantage of people’s need for this strategic commodity, putting it into storage and then selling it later for a higher price.
Mustafa Al-Saltisi, a member of the Grains Chamber at the Federation of Egyptian Industries, said the price of rice had increased in March and April due to a decrease in last season’s harvest — only 1.5 million feddans of land were planted with rice last year — in addition to the desire of sellers to raise prices.
The high prices will not last, he said, as the current increases in rice prices had led to a decrease in demand, meaning that the prices would find a lower equilibrium. There was also more Indian rice available in the local market, Al-Saltisi said, which would tend to lower prices.
In August 2022, when rice was last harvested, animal feed prices were also high, leading some producers to buy rice to use it in the production of feed.
At that time the government had instructed farmers to sell a ton of rice for every feddan they planted for LE6,600, while the feed factories bought it from farmers for LE8,500. As a result, some farmers abstained from delivering rice to the government.
Instead of collecting 1.5 million tons of rice from farmers, the government collected just 250,000 tons.
In September, the government announced a retail guide price for a kg of rice of LE18, which led some merchants to store their produce to sell it later at higher prices. The government’s decision was cancelled a few months later.
In February this year, the low quantities of rice available in the market before the holy month of Ramadan when demand for food traditionally increases led the General Authority for Supply to announce that it would be issuing calls for tenders to buy rice from abroad.
Shehata said the imported amounts were barely enough for the nation’s consumption of rice for 10 days, however. The reason the authority made the move was to prevent further hikes in the price of rice.
It led to a decrease in the price of a ton of bran rice — the crop before de-husking, paddy separation, and whitening — from LE20,000 to LE13,000.
Last year’s harvest amounted to seven million tons, Shehata said, expecting this year’s to reach eight million.
He said that the increase would not lead to a decrease in prices unless farmers received a better offer to sell their rice to the government. The new price would need to be commensurate with the overall hike in the price of commodities, he said, since if it was not some farmers could sell their rice for feed production instead.
Al-Saltisi expects that with the increase in the area planted with rice reaching two million feddans this season, rice prices will stand at LE20 per kg.
The government should not set a guide price for rice, he said, since this had earlier decreased supply in the marketplace.
* A version of this article appears in print in the 6 July, 2023 edition of Al-Ahram Weekly
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