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Egypt wheat reserves enough for 6 months after buying spree

Egypt’s strategic wheat reserves are sufficient to last for six months, a supply ministry official told Reuters following a string of large purchase tenders intended to boost stocks after a smaller local harvest than in the past few years.

The world’s largest wheat importer’s strategic reserves stand at 4.6 million tonnes, supply ministry spokesman Mamdouh Ramadan said.

Egypt has been buying up a lot of wheat on international markets this month, with state grain buyer GASC booking 1.25 million tonnes in July, or about 20 percent of its 6.2 million tonne target for the 2017-18 fiscal year which began in July.

In contrast, GASC bought just 300,000 tonnes in two tenders in July 2016.

Ramadan said the buying spree was a result of a “decline in local supply this season compared with the previous season.”

“Total supply amounted to 3.4 million tonnes compared with about 5.2 million tonnes last season. We have a deficit of about 1.8 million tonnes,” he said.

Egypt’s local wheat harvest runs from April through July.

Egypt this year put in place strict controls on local procurement and scrapped a subsidy in order to curtail widespread smuggling of foreign wheat that inflated local procurement figures. Grain industry sources have said the fraud added over 1 million tonnes to last year’s total.

Egypt consumes about 9.6 million tonnes of wheat annually, mostly to supply its massive subsidised bread programme. Wheat imports in the 2016/2017 fiscal year that ended last month reached 5.580 million tonnes compared to 4.440 million tonnes the year before.

“The main purpose of the purchasing is to ensure we have wheat reserves sufficient for at least 5 months,” Ramadan said.
Source: Reuters (Reporting by Ehab Farouk; writing by Arwa Gaballa and Eric Knecht; editing by Jason Neely and Jane Merriman)

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