Egypt Raises Price for Local Wheat 8.6 Percent

Egypt, the world's largest wheat importer, will increase the price it pays local farmers by 8.6 percent to almost double what it pays for imported wheat, a state newspaper reported. Egypt, which imports about half of the 14 million tonnes of wheat it consumes annually, has long sought to encourage local production and to reduce wheat imports.

The government will buy local wheat next year for a minimum 380 Egyptian pounds ($63.60) per ardeb (140 kg), up from 350 pounds this year, al-Ahram newspaper quoted Social Solidarity Minister Gouda Abdel Khaleq as saying. "Local wheat procurement prices for the new season won't be less than 380 pounds per ardeb," it quoted Abdel Khaleq as saying after a cabinet meeting.

This works out to $454 per tonne, far above the $250 per tonne it paid for foreign wheat at a tender month. Al-Ahram quoted Abdel Khaleq as saying the local price would be raised according to the level of pureness and will range between 380 to 390 pounds per ardeb. Egypt's main wheat buyer told Reuters the government was raising the local price to give an incentive to local farmers. Egypt's wheat buying season begins around April.

"It is the price that has been set before the agriculture season started to allow farmers to prioritise wheat since it is much higher than the prices in the international market," said Nomani Nomani, vice chairman of the state-owned General Authority for Supply Commodities (GASC). Egypt spent 33 billion Egyptian pounds ($5.53 billion) on food subsidies in the fiscal year, which ended on June 30, including wheat, oils, sugar and rice. State finances have come under pressure from a sharp drop in economic growth after a popular uprising unseated the country's president in February.