The Ministry of Supply and Internal Trade sent the Ministry of Finance the new cost of grinding wheat after agreeing with the mills. The cost is estimated at EGP 500 for public mills and EGP 480 for private mills, to be reviewed every 6 months.
Several meetings were held with the millers to reach a fair cost of grinding, said spokesperson for the Ministry of Supply and Internal Trade Mohammed Sweid to Daily News Egypt.
According to the spokesperson, it was agreed that EGP 500 would be paid per tonne for public mills and EGP 480 for private.
The Chamber of Cereals Industry applied for a cost increase to EGP 540 in exchange for the delivery of bran to the ministry, but the ministry did not agree to those prices, and agreed on the previously mentioned prices.
Sweid stated that the Ministry of Supply and Internal Trade sent the full file to the Ministry of Finance to decide on it, in preparation for the start of the implementation of the new system, starting from August 2017, for the liberalisation of wheat and flour prices.
Meanwhile, the mills said the prices were appropriate, but could not be sustained for long periods in light of economic changes. Operating costs increased rapidly in the current period, and it was agreed to review them every six months.
Head of North Cairo Flour Mills Co. Mohamed Shalaby pointed out that the consensus on the cost of milling is based on its revision every six months, according to the economic variables.
Shalaby explained that the agreement stated that in any emergency cases due to any sovereign decisions related to the costs of employment, such as sudden rise in the prices of fuel, a change will be applied.
According to a source at Alexandria Mills, the mills will take over the process of marketing the bran for the purpose of supply, in exchange for a commission at prices set by the ministry, especially that the supply is going to start the new system early next August.
Nevertheless, the Ministry of Supply aims to change the milling system to tighten the screws on the process of smuggling flour and get bran, after exceeding the price of EGP 4,000 per tonne, after they gave it up for grinding.
Meanwhile, the number of mills operating in the local market is estimated at 153 mills until March 2017, of which 81 public sector and 72 private sector mills produce about 25,400 tonnes per day.