Former Minister of Supplies Bassem Ouda
Former Minister: Egypt has less than 2 months of wheat left
Egypt faces serious crisis as lack of cash infringes on ability to import wheat, supply masses with subsidized bread. Will foreign cash help save world's largest wheat importer from starvation?
Egypt has less than two months' supply of imported wheat left in its stocks, ousted
President Mohamed Morsi's
minister of supplies said, revealing a shortage more acute than previously disclosed.
Speaking to Reuters Thursday in a tent at a vigil where thousands of Morsi supporters are protesting against the Islamist president's removal, former Minister of Supplies Bassem Ouda said the state had just 500,000 tonnes of imported wheat left. Egypt usually imports about 10 million tonnes a year.
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Egypt is the world's largest importer of wheat, half of which it distributes to its 84 million people in the form of heavily subsidized saucer-sized flat loaves of bread, which sell for less than 1 US cent. But two and a half years of political turmoil have caused a deep economic crisis in Egypt, scaring away investors and tourists, draining foreign currency reserves and making it difficult to maintain imports of food and fuel.
No tourists, no money (Photo: Reuters)
Bread has long been a sensitive issue in Egypt. Former President Hosni Mubarak faced unrest in 2008 when the rising price of wheat caused shortages.
Although it also grows its own wheat, Egypt needs huge quantities of foreign wheat with higher gluten content to make flour suitable for bread.
The ousted government closely guarded figures about its foreign grain stores even as a shortage of cash halted its imports.
Cash crop (Photo: AP)
The United Nations Food and Agriculture Organization (FAO) said on Thursday that civil unrest and dwindling foreign exchange reserves meant Egypt could have serious food security concerns. Its import requirements next year would be equal to this year, it said.
Since Morsi was toppled last week, the United Arab Emirates, Saudi Arabia and Kuwait have promised $12 billion in cash, loans and fuel, which economists say buys Cairo several months of breathing room to fix its finances.
World's biggest importer of wheat (Photo: AP)
Egypt had halted its purchases of international wheat since February – its longest absence from the market in years – until the eve of Morsi's overthrow, when the state grain buying agency, the General Authority for Supply Commodities (GASC), bought wheat under Ouda's instruction.
"In spite of all the political differences between the parties, the international price of wheat was very nice, we bought about 180,000 tonnes of wheat," the ousted Ouda said.
Mamdouh Abdel Fattah, vice chairman of GASC, was not immediately available to comment.
Apart from imports, Ouda said the government had bought 3.7 million tonnes of home-grown wheat from a harvest that is now finishing. It still has 3 million tonnes of domestic wheat left in its stores, having begun milling the domestic crop in May.
Harvest still in progress (Photo: AP)
Egypt normally mixes its domestic wheat with equal parts foreign wheat to produce flour. Ouda said Morsi's government had tried to increase the ratio of domestic wheat, which would make the country less dependent on imports.
"Our plan was to increase the contribution of the local wheat. We hoped to reach 60%," Ouda said.
Morsi's government said on June 26 it had 3.613 million tonnes of total wheat but did not reveal how much of that was imported.
Earlier this week a report issued by a US Department of Agriculture (USDA) attaché in Egypt said domestic wheat stocks would last through October at current consumption levels. It gave no estimate for when foreign wheat would run out.
In the past, Egypt maintained stocks of both imported and local wheat that would cover at least six months' needs. While the Gulf Arab states' cash injection is expected to help Egypt replenish its wheat stocks, it will need to start buying soon and in large quantities.
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