Egypt says to grow 3 mln acres of wheat in 2011/12, raises local prices

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SHARM EL-SHEIKH: Egypt, the world’s largest wheat importer, expects to grow 3 million acres of wheat in the 2011/12 season, the chairman of the country’s National Seed Council said, about the same acreage as last year while it offers to pay farmers a higher price.

The planting area will be "around 3 million acres, plus or minus … nearly like last year’s area," Fawzi Mahrous told reporters on the sidelines of a Russian grain conference in Egypt on Wednesday.

Egypt raised the price it will pay local farmers for their wheat next season to LE 380 ($63.60) per ardeb (140 kg) from LE 350 during the last season to give them an incentive.

The new price works out to about $454 per ton, far above the $250 per ton Egypt paid for foreign wheat at a tender this month.

"We are trying to increase the area, but it is not that easy as the other areas are planted with other crops," Mahrous said.

Egyptian wheat yields rose from 5.35 tons per hectare (2.47 acres) in 2010 to 7.14 tons per hectare in 2011 due to the use of improved seeds and improved weather conditions, a report issued by the US Department of Agriculture attache said in May.

Local procurement increased in 2011 to 2.6 million tons from 2.1 million tons a year earlier due to better prices.

Egypt consumes around 14 million tons of wheat annually and imports around half of that amount.

Egypt spent LE 33 billion on food subsidies in the fiscal year which ended June 30, including wheat, oil, sugar and rice.

State finances have come under pressure from a sharp drop in economic growth after a popular uprising unseated the country’s president in February.

Egyptian wheat is planted in October and November and harvested in April and May.

Egypt raises prices

Egypt will increase the price it pays local farmers by 8.6 percent to almost double what it pays for imported wheat, a state newspaper reported on Wednesday, in a bid to encourage local production and to reduce wheat imports.

Al-Ahram newspaper quoted Social Solidarity Minister Gouda Abdel Khaleq as saying, "Local wheat procurement prices for the new season won’t be less than LE 380 per ardeb."

Abdel Khaleq added that local prices would be raised according to the level of pureness.

Egypt’s wheat buying season begins around April.

"It is the price that has been set before the agriculture season started to allow farmers to prioritize wheat since it is much higher than the prices in the international market," said Nomani Nomani, vice chairman of the state-owned General Authority for Supply Commodities (GASC).




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