UPDATE 1-Egypt has bought around 3 mln tonnes of local wheat - minister

Sat May 24, 2014 4:21am EDT

(Adds background on this year's harvest, subsidies)

CAIRO May 24 (Reuters) - Egypt, the world's biggest wheat importer, has bought around 3 million tonnes of local wheat from farmers since the harvest began last month, the supplies minister said on Saturday.

The figures are an indication that the government appears likely to meet its aim for local purchases this year.

The government had paid 6.5 billion Egyptian pounds to farmers for the wheat purchased so far, Supplies Minister Khaled Hanafi was quoted by state news agency MENA as saying.

The government wants to buy more of the local crop to cut its food imports spending. It bills the effort as key to a plan to increase self-sufficiency in the strategic sector.

In order to encourage farmers to sell their wheat to the government, and to grow wheat instead of other crops, the Supplies Ministry set a local price this year that exceeds what Egypt pays in the international market by more than $100 per tonne.

It aims to purchase 4.4 million tonnes of local wheat in the harvest that ends next month, similar to the target set, but not met, last year by the government of ousted Islamist President Mohamed Mursi.

The harvest is in full swing in northern parts of the Nile Delta and nearly finished in fields further south.

Egypt estimates its wheat crop this year at around 9 million tonnes, in line with the United States Department of Agriculture's estimate of 8.95 million tonnes.

Millions of poor Egyptians rely on government subsidised bread, but the wasteful and corrupt system for providing it strains the budget and foreign reserves. Successive governments have resisted tackling the problem but initial efforts to do so have recently begun.

The Supplies Ministry began rolling out a smart-card system last month that was piloted under Mursi. Minister Hanafi hopes the system will be in place nationwide within three months, as a first step toward monitoring consumption and eventual subsidy reform.

(Reporting by Omar Fahmy; Writing By Maggie Fick; Editing by Robin Pomeroy and Stephen Powell)

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