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Egypt wheat figures appear half baked

Former minister's claim the country will be out of wheat in two months is denied by supply official.

Last Modified: 14 Jul 2013 11:17
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Cairo, Egypt - Bread - or rather figures accurately depicting how much of Egypt's food staple will be available this year - appears to be the latest victim of the country’s political crisis.

Bread is a vital component in each Egyptian family's every meal. In 2011, when thousands took to the streets seeking to end the 30-year rule of Hosni Mubarak, the main chant that resounded in all rallies was "bread, freedom and social justice".

However according to experts, the government of recently ousted president Mohamed Morsi has repeatedly given false figures on how much of the commodity the world’s biggest wheat importer really has.

Late on Wednesday, a week after the military ousted Morsi and members of his government from power, former Minister of Supplies Bassem Ouda told Reuters news agency that the country’s wheat stock may run dry in two months.

According to Ouda, Egypt, the world's biggest wheat importer, has about 500,000 metric tons of wheat to meet the demands of 84 million people. World Bank figures for 2012 show the country is expected to consume about 18 million metric tons of wheat in 2013.

Ouda’s comments came as a surprise to much the public and contradicted assurances by his ministry in February that the country’s wheat inventories would be sufficient to last out the year.

However, not everyone was surprised.


"It was very expected for this to happen," Hesham Aboul-Dahab, former member of the Chamber of the Grain Industry at the Federation of Egyptian Industries, told Al Jazeera.

"The ministry has repeatedly given inaccurate figures to the public about local wheat production and a so-called self-sufficiency," he added.

Aboul-Dahab said Ouda's ministry had relied on "unrealistic and impossible figures to reassure and mislead the public into believing that the government was doing something right, amid several shortages. They kept speaking of a far-fetched self-sufficiency," Aboul-Dahab said. "But now that Ouda is gone, he has to reveal the true figures."

Adding to the confusion, Abdel-Fattah, vice president of the General Authority for Supply Commodities (GASC), told state-run news agency MENA on Thursday that Ouda’s most recent figures are wrong.

Egypt's supply of wheat, whether imported or domestic, is sufficient to last till end of November, Abdel-Fattah said, urging the media "not to pay heed to rumours”.

Flattened economy

The struggle under Morsi's government to maintain a sufficient wheat supply appears to be part of a larger problem.

Egypt has been battling for more than two years with a flattened economy, crippled by political instability, and a security lapse. A shrinking tourism sector and scarce foreign investments have resulted in the depletion of net international currency reserves.

According to the latest figures on the country's central bank website, net foreign currency reserves reached $14.92 billion this year, almost a 60 percent drop from the $36bn recorded on the eve of the 2011 revolt that toppled Mubarak.

Morsi's government was forced to reduce spending as credit rating agencies repeatedly downgraded the country's sovereign credit issuance. Cuts to fuel imports resulted in intermittent power cuts and disrupted industrial production.

Talks with the International Monetary Fund for a $4.8bn are on currently on hold.

Great expectations

All the while the government campaigned to encourage local farmers to produce more wheat. According to Aboul-Dahab, the goals set out by the government for boosting wheat production were "ridiculous".

"Up till last year, local farmers could annually provide 2.5 million metric tons," Aboul-Dahab said. "So when the outgoing ministry said they will raise that to 4.5 million, it sounded hard to achieve, but perhaps manageable. But then they pushed the figure to 9.5 million metric tons, which was just ridiculously impossible."

Although Egypt produces wheat of its own, the Egyptian grain needs to be mixed with higher-gluten imported wheat to make flour suitable for bread. Imports of the grain have been reduced by 1.8 million metric tons to 8 million, according to recent statements by officials.

According to a recently released report by the US Department of Agriculture (USDA), the Egyptian government has forecasted wheat procurement at 4 to 5 million metric tons, which "appears unrealistic".

"A more realistic figure for procurement of Egyptian wheat is 3.0 to 3.2 million metric tons in 2013/2014," the report said.

With foreign debt piling up and no signs of an economic recovery, a request by Morsi during an April visit to Moscow, Russia for wheat supplies was turned down by President Vladimir Putin.

However, since Morsi's ouster, Egypt had received aid packages totalling $12bn from the UAE, Saudi Arabia and Kuwait in the form of free-interest deposits in the central bank, grants and loans.

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This, together with the US' "unwelcoming stand towards political changes" in Cairo, could encourage Russia to provide a "speedy" supply of grain to offset shortages till GASC, the state grain buying agency, issues tenders, Aboul-Dahab said.

Meanwhile, Egyptians are expressing more and more frustration at the prospect of bread shortages.

"Even bread is politicised? They [governments] politicised freedoms, rights, even religion, and they'll soon politicise the air we breathe and the water we drink," said Sanaa Abdel-Hamid, a housewife and mother of four as she walked away from the bakery with her bread supply.

Mamdouh Nassar, a teacher and father of three, told Al Jazeera as he stood in a queue for government-subsidised bread loafs that he does not know what the truth is about the state of Egypt's wheat supply.
 
"No one knows who to believe anymore," Nassar said. "We're caught in the middle of a fight which we don't care for. We just want stability, better living conditions - and bread."

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Source:
Al Jazeera
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