CAIRO: Egypt will begin exporting 100,000 tons of rice every month starting Dec. 1 curbing an 18-month ban on rice exports, the trade minister said Thursday in a statement.
Under the amended regulations, Minister of Trade and Industry Rachid Mohamed Rachid said, export licenses will be issued through a closed envelope bidding process.
The total amount exported per license will be capped at 34,000 tons.
In September, the trade ministry said Egypt will extend the ban on rice exports for another year. First passed when food prices spiked in March 2008, the ban attempted to keep the domestic supply of rice inexpensive.
The latest decision “comes after much debate over issues pertaining to rice exports, the securing of supply for national demand either for Egyptian consumers or for the amounts needed for the national subsidy program and the cost versus selling price to farmers, the ministry statement read.
The amounts exported will be subject to review every month based on the balance between the domestic supply, the available rice stock and the amounts needed though the national subsidy program.
Export fees levied on rice will be reduced from LE 2,000 per ton to LE 1,000 per ton.
“This was a very complicated equation to balance because we had several players involved with different demands, Rachid said.
“On the one hand, you have the farmers who already have rice stock from last year and new crop from this year that they were unable to sell because the price they were receiving was lower than their production cost. You have the rice producers and the mills on the other hand who have stock that is building up and they are unable to sell domestically or export.
“You also have the consumer, who is most concerned with the supply in the domestic market and the price of rice. Finally, you have a strategic decision made by the government as part of the agricultural policy to reduce the amount of rice planted in Egypt because of issues pertaining to water supply. These amendments are designed to take into account the concerns of all those parties and balance them.
The decision was made based on large of stock currently available in Egypt from the previous year, which is around 500,000 million tons, plus the anticipated amounts resulting from this year’s crop.
As a result, the purchase price of rice from farmers is expected to reach LE 800 and LE 1,200 per ton, while the increase consumer prices should be “minimal. Egypt currently produces an average of 2 million tons of rice per year, according to ministry figures.
Last year, the Egyptian government announced that it aims to decrease the agriculture and production of rice to around 1.3 million tons per year due to water constraints, and in turn, implemented a rice export ban.
This decision was amended in 2009 to allow limited rice exports by producers supplying rice to the national subsidy program. -Daily News Egypt
