DUBAI (Reuters) - Egypt plans to cut its state wheat imports this year by around 10 percent, with the world's largest grain importer relying instead on its domestic crop and building storage, Egypt's Agriculture minister said on Tuesday.
Egypt is the world's biggest wheat importer, buying about 10 million tonnes a year or around half of its consumption, with purchases shared between state wheat buyer General Authority for Supply Commodities (GASC) and private importers.
But two years of political turmoil and economic crisis since the ousting of autocrat Hosni Mubarak have eroded hard currency reserves at a rate of about $1 billion a month, raising questions about Egypt's ability to purchase in open tenders.
Supply Minister Bassem Ouda was quoted last week as saying he expected U.S. and European exporters to provide "easy terms" as it seeks to replenish falling stocks.
Egypt needs around 9 million tonnes of wheat for its subsidised bread prgramme, Salah Abdel-Momen told Reuters in an interview on the sidelines of an industry conference in Dubai.
"We are expecting, God willing, to produce around 9-10 million tonnes this year," he said. "Last year the total amount that we could store from our own local wheat was 3.8 million tonnes, this year with the addition of more storage we are expecting to reach 4.5 million tonnes."
Egypt produced 8.4 million tonnes of wheat last year. The U.S. Department of Agriculture and International Grain Council predict it will increase production only marginally to 8.5 million tonnes this year.
With the improvement and additional storage facilities Abdel-Momen expects state imports to be around 4-5 million tonnes, a 8-10 percent drop from last year.
Asked if Egypt had a budget allocated for imports, he said that there was no shortage of funds for importing the grain needed for subsidised bread, and around $1.6 billion will be used to purchase wheat from Egyptian farmers.
"We will not compromise on the quality of the subsidized bread, and it's not true that we plan to buy lower quality wheat from abroad, we'll buy from countries like Ukraine, Russia, France and the USA," he said.
However with the country's politics paralyzed and its hard currency-earning tourism industry devastated by repeated waves of deadly riots between supporters and opponents of President Mohamed Mursi, industry sources said Egypt would face difficulties making such purchases.
State purchases since January have fallen to less than a quarter of the same period last year.
The country's strategic stocks of imported and local wheat fell to 2.116 million tonnes of the grain from international and local markets, enough to last 85 days, a cabinet report said on March 27.
However Abel-Momen said that stock levels were around 2.8 million tonnes, enough to last till June.
"Our biggest challenge right now is to build enough storage areas so we can store more of the domestic crop, and once we do that we won't be at risk of any shortage."
