Local suppliers will start supplying the General Authority for Supply Commodities (GASC) with local wheat for the next three months. The wheat will be supplied at a price of EGP 420 per one ardeb (equal to roughly 150kg), Minister of Supply and Internal Trade Khaled Hanafy, announced Monday.
The amount will be used in producing subsidised bread, where local farmers and traders are expected to provide a total of 3.7m tonnes of wheat making strategic wheat reserves sufficient until September 2015.
In October 2014, Cabinet spokesman Hossam El-Kawish said the government will purchase wheat from domestic farmers at a rate of EGP 420. This will occur even if this amount is higher than global prices, in order to support Egyptian farmers.
Hanafy said the ministry will take quick actions, overcoming obstacles facing the local market, to receive the largest amount of domestic wheat to diminish the gap between production and importation of wheat.
Egypt is the world’s largest wheat importer, but aims to reduce wheat imports in 2015 to between 4m-4.5m tonnes. The government also aims to reduce dependence on imports in light of the country’s weak dollar reserves.
As much as EGP 10bn has been allocated for paying local suppliers. They will immediately receive money after sorting the supplied wheat and making sure that it is clean, unmixed with sand, gravel or old wheat, Hanafy said.
In February 2015, GASC signed a contract to purchase 290,000 tonnes of US wheat at an average cost of $273.11 per tonne.
The wheat was purchased through an international tender and will also be used for the production of subsidised bread and is expected to be supplied between 15 and 25 April, GASC vice president Mamdouh Abd El-Fattah previously noted.