Egypt ‘has wheat stocks for 4 months’
Cairo, May 12, 2011
Egypt, the world's biggest wheat importer, said it had stocks of imported wheat to last for about four months, and even longer if the upcoming local harvest was taken into account.
Nomani Nomani, vice chairman of the General Authority for Supply Commodities (GASC), said GASC had funds to finance wheat purchases from international tenders, dismissing earlier trader speculation that financing had been cut off amid economic problems following a revolt that overthrew longstanding Egyptian leader Hosni Mubarak.
"We have no financing problems, and funds are now allocated towards local wheat purchases," Nomani told Reuters in an interview. "The government had allocated 9.6 billion Egyptian pounds ($1.62 billion) for the domestic wheat purchase season."
The absence from the market of GASC has been a major talking point for the trade. It last bought wheat on Feb. 23 for late-April delivery.
Egypt's local harvest purchase season starts in mid-April and ends in mid-July. Nomani said GASC eyes local purchases of up to 4 million tonnes, which is enough for five months.
He said he expected the state budget for fiscal year 2011/12 starting in July would include a bigger food purchasing bill than 2010/11 year "in light of rising global food prices."
"I expect the budget to include a bigger food purchasing bill, including that for wheat, oils and sugar purchases."
Egypt's cabinet last month approved an extra 10 billion pounds for the fiscal year ending June, 30 to help slow rising food prices.
Egypt, which relies on imports for at least half of its domestic consumption, could suffer further food price inflation after the U.N. Food and Agriculture Organisation said concerns over Chinese and US winter crops could push global food prices higher while global production lags rising demand.
Food and beverage prices, which account for 44 percent of the weighting of the basket Egypt uses to measure inflation, rose 21 percent in the year to April, versus 20.5 percent in March.
Economists expect headline inflation to continue rising in May, pushed up by higher food and oil prices as well as currency depreciation.
Egypt, the Arab world's most populous country, subsidises key staples including wheat, sugar, rice and vegetable oils, ensuring domestic prices are stable.
About 63 million Egyptians benefit from food subsidies.
Since the start of the 2010/11 fiscal year on July 1, GASC has purchased about 5.22 million tonnes of French, US, Canadian, Australian and Argentine wheat.
In the fiscal year that ended on June 30, GASC purchased some 5.53 million tonnes of US, French, Russian, German, Kazakh and Canadian wheat at international tenders. – Reuters