Egypt ups wheat production, rice duty

Egypt has raised the export duty on rice to EGP300 (Dh201) a tonne, from 200 pounds, the state news agency Mena said on Saturday.

Egypt introduced the duty last September to ensure supplies of rice to the local market and hold down domestic prices.

Mena said Trade and Industry Minister Rachid Mohamed Rachid had increased the duty in response to higher world prices.

The government justifies the duty by saying that rice exports indirectly export water, which is a scarce resource subsidised by the government.

Egypt produces about four million tonnes of milled rice a year and consumes about 3.2 million tonnes. It exports its own short-grain rice, mainly to other Arab countries, and imports some long-grain rice from Asia.

The retail price of local rice has risen by up to 30 per cent in recent months, along with sharp rises in the prices of other staple foodstuffs.

The government tried to persuade rice dealers to impose their own voluntary restrictions on exports but the prices on offer abroad were too high to resist, said an expert familiar with the rice trade.

Meanwhile, Mena quoted Agriculture Minister Amin Abaza also on Saturday saying that Egypt expects to grow about eight million tonnes of wheat this year. The harvest would compare to 7.39 million tonnes in the 2007 season.

Abaza said that, however, farmers had planted 1.1 million hectares with wheat this year – the same as last year.

He said the government was intent on increasing yields and cutting down on wastage, which cuts output by 15 per cent.

The government has promised a sharp increase in the price it offers farmers for their wheat this harvest, which runs from April and ends in the summer.

In mid-February, it said it would pay at least EGP320 (Dh215) for an ardebb, or 150kg, the equivalent of $390 a tonne. Mena said the producer price would depend on world prices and could be as high as EGP450 an ardebb.