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Country Briefs

  Egypt

Reference Date: 21-September-2017

FOOD SECURITY SNAPSHOT

  1. Cereal crop production in 2017 forecast at average levels

  2. Import requirements estimated to increase slightly during 2017/18 marketing year

  3. Inflation rates at highest levels in last 30 years following sharp currency depreciation in November 2016

Average cereal harvest forecasted

The 2017 wheat and barley harvest was completed by early June. Maize and rice crops will be harvested from early October. Across the country, normal climatic and supply conditions were reported. Cereals are grown on irrigated fields, yielding stable harvests. Some 1.26 million hectares were planted with wheat in the current season, about the same as average, yielding 8.8 million tonnes of wheat.

The Ministry of Supply and Internal Trade (MOSIT) purchased 3.4 million tonnes of local wheat at USD 210-218 per tonne (EGP 555- 575 per ardeb or 150 kg) based on quality and moisture levels. In the past, a fixed procurement price often well above international prices was announced at the beginning of the planting season to encourage farmers to increase the area planted to wheat and discourage farmers from switching to other crops.

Cereal import requirements forecast slightly above average

The country remains the world’s largest wheat importer. Wheat imports for the 2017/18 marketing year (July/June) are estimated at 12 million tonnes, about the same as the previous year and about 9 percent above the average for the last five years. The three largest suppliers in the 2016/17 marketing year were the Russian Federation (4.47 million tonnes), Romania (1.26 million tonnes) and Ukraine (560 000 tonnes). As of August 2017, the country maintained 4.86 million tonnes in wheat reserves, sufficient to cover its needs until February 2018.

The overall cereal import requirements in the 2017/18 marketing year (July/June) are forecast at around 22.1 million tonnes, some 2 million tonnes more than in the previous year and 17 percent higher than the five‑year average.

Elevated inflation rates persist

Following the sharp currency depreciation in early November 2016, the annual food and beverage inflation rate gradually increased from 13.8 percent in October 2016 to almost 44 percent in April 2017, marginally easing to 42 percent in August 2017. The general inflation rate in July 2017 reached 33 percent, the highest level in the last 30 years as higher domestic fuel prices push up distribution costs.

Around 70 million of the country’s 92 million people benefit from a subsidy card programme which entitles them to EGP 21 (USD 1.16) worth of goods monthly in addition to five loaves of bread per day at a EGP 0.05 per loaf (USD 0.01). Bakeries are subsidized for the difference in costs, currently about EGP 0.57. Under the current system, beneficiaries can convert their unused “bread quota” into points to spend on 44 selected food products redeemable in State-owned shops or partnered private shops. From August 2017, MOSIT stopped subsidizing flour used in bakeries selling subsidies bread. Instead, the subsidies are tied to the actual bread purchased by beneficiaries, saving EGP 8 billion (USD 447 million) on 2017/18 food subsidies.

Disclaimer: The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of FAO concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.