REUTERS - Egypt buys 4 mln tonnes of local wheat, surpassing target

Thursday 21-05-2015 07:19 PM
REUTERS - Egypt buys 4 mln tonnes of local wheat, surpassing target

A tractor piles wheat grains on a drying complex at the Solgonskoye farming company in the village of Solgon, southwest from Krasnoyarsk, September 6, 2014. Russian wheat prices rose for a second straight week thanks to a record pace of August exports, high domestic demand and weak rouble that offset continuing harvesting, analysts said on Monday. Picture taken September 6, 2014. REUTERS/Ilya Naymushin


ABU DHABI, May 21 (Reuters) - Egypt's supplies ministry said on Thursday it had bought 4 million tonnes of local wheat so far in the procurement season which began in mid-April, surpassing its target of 3.7 million tonnes.

Egypt, the world's largest importer of the grain, will continue to purchase local wheat until mid-July, said Mahmoud Diab, spokesman for the ministry.

The Egyptian government annually fixes a local procurement price for Egyptian wheat that is above global prices in an attempt to encourage farmers to grow the crop.

This year, Egypt is paying its farmers 420 Egyptian pounds ($55) per ardeb, which is equivalent to about 150 kg. A total of 10 billion Egyptian pounds ($1.3 billion) has been allocated for local wheat purchases.

The high price Egypt pays its farmers has led to a smuggling business in recent years, in which traders sell the government foreign wheat, mostly Russian, falsely labeling it Egyptian.

In March, Egypt's GASC bought 110,000 tonnes of foreign wheat already available in the country from local traders, saying the purchase would limit the amount of imported wheat available for smuggling in the local purchasing season.

The North African country imported 5.46 million tonnes of wheat in the fiscal year 2013/2014, in addition to procuring 3.7 million tonnes of local wheat, according to Reuters data.

(Reporting by Maha El Dahan; Editing by David Clarke)

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