February 10, 2014 / 5:36 PM / 4 years ago

UPDATE 1-Egypt has enough wheat to mid-June while builds storage

(Adds minister’s comments on wheat storage)

CAIRO, Feb 10 (Reuters) - Egypt’s strategic stock of wheat is enough to last until June 15, the supplies minister said, reassuring the market while he also raised the longer-term target for storage capacity as it moves to become more self-sufficient.

Mohamed Abu Shadi told journalists after a cabinet meeting on Monday that Egypt would increase storage capacity to 6 million tonnes by around mid-2015, an amount he called “appropriate.” That was up from a 5.5 million tonne target he cited last month.

Government officials have said storage capacity is vital for Egypt, the world’s largest wheat importer, to make better use of its domestic wheat production and reduce its need for imports.

The state has been making heavy wheat purchases in recent months and building supplies for its 21 billion Egyptian pound ($3 billion) annual programme to provide saucer-sized flat loaves of bread to millions of Egyptians at a subsidised price of less than 1 U.S. cent each.

Abu Shadi’s latest update on strategic stocks came as no surprise after he said on Jan. 18 that Egypt had enough wheat to last until the first week of May.

Egypt buys around 10 million tonnes of wheat a year from abroad through the state and private buyers.

“Egypt consumes 15 million tonnes of wheat annually, and the storage capacity is 1.5 million tonnes,” Abu Shadi said.

He said that the increased capacity will come from a state-funded silo-building project and from a project funded by the United Arab Emirates, which pledged aid to Egypt to build new silos in October.

The agriculture minister said in November that at least 20 percent of the total grain produced locally was wasted due to storage problems.

Farmers in the fertile Nile Delta north of Cairo are often forced to store their harvest in makeshift open-air plots of land set up on roadside as storage areas, a system that leaves wheat exposed to insects, animals, and weather. (Reporting by Omar Fahmy; Writing by Maggie Fick and Tom Perry; Editing by Jane Baird)

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