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Reference Date: 10-November-2014

FOOD SECURITY SNAPSHOT

  1. Above-average cereal crop forecast for 2014

  2. Average cereal import requirement envisaged

  3. High inflation rates as fiscal consolidation reforms are rolled out

Favourable prospects for 2014 cereal crop production

Sowing of the 2015 barley and wheat crop is about to start, while harvesting of the 2014 maize and rice crop is nearing completion. Reports and satellite data indicate that the conditions for crop development in 2014 were favourable.

The 2014 cereal harvest, at 21.6 million tonnes, is forecast to be slightly above last year and the five-year average. Wheat production is estimated to have increased by 8 percent on the average to 9 million tonnes, while maize production is likely to be below the average but about the same as last year.

Efforts are underway to increase water and land productivity as well as to utilize drought-tolerant higher yielding varieties. Streamlining post-harvest handling, transportation and storage will also result in higher production. High Government procurement prices, at EGP 420/ardeb (USD 400/tonne) since 2013/14 season, are also encouraging additional plantings. The Principal Bank for Development and Agricultural Credit is starting a programme to finance agricultural co-operatives to allow them to access funding before the wheat supply season. The upcoming cropping season can be challenged by high prices of fuel and fertilizer as a result of the subsidy reform of July 2014 (described in the inflation section). Fertilizer prices were scheduled to increase by 50 percent, creating discontent among farmers.

A national silos construction project is progressing to increase the country’s wheat storage capacity from 1.5 million tonnes to almost 5 million tonnes by the end of 2015.

Cereal import requirements forecast at average levels

Egypt remains the world’s largest wheat importer. Accordingly, cereal import requirements in the next 2014/15 marketing year (July/June) are forecast at about 17.4 million tonnes, about 8 percent lower than the previous year and 3 percent higher than the five-year average. Wheat imports for the 2014/15 marketing year are estimated at 10 million tonnes, about the same as the previous year and the average.

The Government expects to purchase 4.25 million tonnes of wheat from local farmers in 2014/15, compared to 3.7 million tonnes of local wheat purchased in 2013/14. Imported wheat is mixed with local wheat to increase its gluten content. Local reports indicated that strategic wheat reserves allocated for subsidized bread production is enough to last until the first week of March 2015.

High inflation rates as reforms are rolled out

The annual food and beverage inflation rate was 11.8 percent in September 2014 compared to 15.61 percent in April 2013. The largest monthly increase of 3.5 percent in general inflation rate since 2008 was recorded in July 2014 following the fiscal consolidation programme of the Government which commenced the phasing out of energy subsidies. Among others, prices of diesel increased by 63 percent, gasoline by 40 to 78 percent (depending on the octane) and electricity by 28 percent.

Egypt is progressing on the rolling out of the ration card system for food subsidies. Subsidized bread continues to be sold at the unchanged subsidized price of EGP 0.05 per loaf (free market price of EGP 0.35 per loaf) with a maximum of five loafs of bread per person. Bakers are no longer allowed to buy wheat flour at subsidized prices but will be reimbursed by the Government based on sales data gathered from the smart cards. The new ration card system, currently in use in cities in the Suez Canal, Alexandria and introduced in Cairo, provides citizens with 20 privately and Government procured products, including meat. It aims to provide more balanced diets to the poor by extending choice of commodities and contribute to the fiscal consolidation.

According to UNHCR, as of late October 2014, there were 140 000 registered Syrian refugees in Egypt. In response, WFP is planning to assist 76 000 beneficiaries by December 2014.









Relevant links:
From GIEWS:
 Food Price Data and Analysis Tool
 Earth Observation Indicators
 Maps
 Seasonal Indicators
 Vegetation Indicators
 Precipitation Indicators
 Graphs & Data
 NDVI & Precipitation
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