Egypt: Egypt aims to boost wheat self-sufficiency
2014/08/16
With only limited opportunity to improve wheat yields due to shortages of arable land and water, Egypt is looking to tightening up the storage and logistics links in its grain supply chain to reduce import costs and bolster food security.
Egypt’s annual wheat consumption is between 15m and 20m tonnes, the exact figure being imprecise as growers often hold back up to half of their harvest for personal consumption and seed stock for the coming season’s planting. Of the total consumption, Egypt regularly imports 10m tonnes or additional of wheat per year on international markets, making it the world’s major importer of the grain.
These imports impose a significant drain on Egypt’s currency reserves. The bulk of the $4.6bn the national spends annually on food imports goes towards buying grain. Wheat represented the major single subsidy spending next fuel price support, which was unexpectedly cut at the start of July, increasing the prices of car fuel and natural gas by additional than 70% and driving up food prices by 20% according to economists.
Barriers to upping production
The government has sought to reduce its reliance on imports by encouraging better output at home, but the potential for increase within the agriculture sector is limited.
“Farmers are encountering various challenges from weather, to market prices, agricultural input prices, labour, etc,” Nasser Abualrous, Egypt Country Chief for the agribusiness group Syngenta, told OBG. “Production cost is on the rise and the only way to have profitable farming is to adopt technology and adopt agricultural best practices to increase yield dramatically,” he added.
Most of the arable land suitable for wheat cultivation has by presently been put under the plough, while residential and industrial expansion is placing additional pressure on available farmland and scarce water resources, with urban sprawl accounting for an increasing proportion of fields.
Reaping full price from harvest
To compensate for its limited production capacity, Egypt is stepping up measures to ensure that the maximum possible of each harvest reaches the mills safely and in good condition. Estimates put wastage as a result of losses while in store or while being transported at between 1m and 1.6m tonnes a year, damage that is valued at up to $500m. It is believed that much of this loss will be prevented through upgrading the network of silos across the country and planned improvements to logistics services.
In May, nine new silos with a combined capacity of 45,000 tonnes in the port city of Alexandria were inaugurated, with a further 18 units, each capable of holding 5000 tonnes of grain, due to be completed by June next year.
The new silos are part of a broader programme, announced late last year, to expand the country’s grain storage capacity from 3m tonnes to 4.5m tonnes so as to both reinforce food security and reduce wastage. In turn, this will as well reduce the imports bill, allowing additional funds to be directed into the local economy.
This programme has been given support by the UAE, which is providing funding for up to 25 wheat silos with a combined capacity of 1.5m tonnes. Contracts for the construction of the initial of these silos, to be built in the northern districts of Amiriya and Damietta, were awarded in late May.
In the market for grain
Egypt’s existing silos are by presently filling with this year’s harvest. The national grain agencies are well on their way to reaching their buying target for this season, having announced before this year their intention to acquire 4.4m tonnes of domestic wheat, estimated at around half the total harvest.
The remainder of expected request will again be fulfilled by imports. In 2013, Egypt took a lower profile on the international grain markets, scaling back imports as foreign currency shortages and weakened exchange rates impacted buying power. This year, the additional stable political situation combined with international support has prompted a determined return to the market.
Most recently, the General Authority of Supply Commodities (GASC), the national agency responsible for grain imports, announced in May it had struck agreements with Ukraine for a sizeable purchases of wheat, with 60,000 tonnes due to be delivered in the last 10 days of June. This purchase comes on top of the 230,000 tonnes contracted from Ukraine, Russia and Romania in April.
Egypt may as well cast its import net wider this year, with the GASC mulling plans to relieve last year’s restrictions on water content. Egypt set a limit of 13% moisture content in imported grain, a level that all but ruled out sales from France, which was formerly one of the country’s leading wheat suppliers. But with a moisture content of about 13.5%, French wheat was unable to meet the tighter requirements in 2013. If the GASC, which is responsible for around half of Egypt’s average 10m tonnes of wheat imports, does draw back on its standards, this would open up additional import opportunities and broaden the base of Egypt’s buying programme.
- Related Articles
-
Tarek Abdel-Rahman, Co-CEO of Palm Hills Developments
2016/05/25 The clamor for property in Egypt shows no signs of abating and the resilient sector is ripe for foreign investment , as the current rate of supply is barely covering a quarter of request. Tarek Abdel-Rahman, Co-CEO of one of the country’s leading property developers, Palm Hills Developments, discusses the company’s current projects, building a rock-solid reputation, and why foreign direct investment is set to rise. -
Africa’s 20 most attractive countries for investors
2016/05/16 Despite its economy slowing down, South Africa remains Africa’s most attractive country for investors, according to the 2016 Ernst & Young Africa Attractiveness Index. The statement evaluates evolution made in governance, diversification, infrastructures, business enablement, human development inclunding resilience to current macroeconomic challenges. Morocco is ranked second on the index, followed by Egypt, Kenya, Mauritius, Ghana Botswana, Tunisia and Rwanda. Cote d’Ivoire comes tenth. Africa’s top economy, Nigeria comes 15th, mainly because of its poor performances in terms of governance and human improvment(See full ranking below). -
Egypt’s GDP grew by 4.2% in 2015, according to the IMF
2016/02/12 The year 2015 brought welcome stabilisation and recovery to Egypt, next a difficult post-revolution period marked by continued upheaval and sluggish increase. The initial part of the year saw a range of encouraging developments, inclunding the completion of the strategically vital Suez Canal expansion, the commitment of additional than $35bn in planned foreign investments, closer economic ties with Gulf allies and promising activity in the fast-moving consumer goods (FMCG) sector. -
safewater
2015/11/12 Gal Water Technologies Ltd. is backed by 20 years of experience in supplying water treatment systems for Industrial, Agricultural and Consumable water. -
Egypt Outlook for 2015-17
2015/08/11 The country (Egypt) is situated in Northern Africa, bordering the Mediterranean Sea, between Libya and the Gaza Strip, and the Red Sea north of Sudan, and includes the Asian Sinai Peninsula. Israel for 266km, Libya for 1115km and Sudan for 1273km. Land in Egypt is vast desert plateau interrupted by Nile valley and delta The climate is desert with hot and dry summers with moderate winters. OverviewEgyptian(s) speak Arabic (official), English and French widely understood by educated classes. The climate is desert with hot and dry summers with moderate winters. Egyptian(s) speak Arabic (official), English and French widely understood by educated classes. OVERVIEW Growth momentum depends on the political transition Growth of GDP in North Africa fell markedly in 2011, particularly in Libya, and registered only +1.8% in Egypt, after over +5% the year before. All sectors of the economy were adversely affected by the period of demonstrations, strikes and regime change and by the uncertainties that followed. In particular, tourism was badly affected, with visitor numbers and sector earnings down sharply. Widespread demonstrations have dwindled in intensity and levels of activity have therefore increased, but only moderately. Uncertain governance (changes to the electoral timetable) and policies (with several key reversals) continued into 2012, so that domestic consumption and investment were constrained and foreign investment very limited. GDP growth in that year is estimated at around +2.2% and a further political upheaval in mid-2013 again disrupted economic activity, with GDP growth last year of only +2%. Most of the factors impeding higher growth in 2011-13 remain evident in the early part of 2014, although business confidence has improved moderately under the military-backed government.
-
- Egypt News
-
- EGYPT: Egyptian investment firm Qalaa Holdings is confident its new refinery
- EGYPT: PACT Real Estate Group PACT to create ‘new destinations for new generations’ in Egypt
- BOTSWANA: Routes Africa forum aims to improve African air connectivity
- BOTSWANA: Economic integration is helping boost trade and investment in Africa
- BOTSWANA: Africa’s economic growth is likely to be slower in the intervening years
- BOTSWANA: Beyond Commodities: How African Multinationals Are Transforming
- Trending Articles
-
- CHINA: United States sees China investment talks ‘productive’ after new offers
- AUSTRALIA: Australia taxes foreign home buyers as affordability bites
- SERBIA: China’s Xi sees Serbia as milestone on new ‘Silk Road’
- INDIA: Indian central bank chief to step down in surprise move
- THAILAND: Foreign investment plummets in junta ruled Thailand
- SOUTH AFRICA: South Africa to extend ICT reach