CAIRO: Egypt, the world’s biggest wheat importer, is keen to buy French grain but would like it more competitively priced at international tenders, the main state buyer said on Tuesday.
Egypt, which annually consumes 14 million tons of wheat and imports about half its needs, has bought heavily from Russia this year.
But Nomani Nomani, the vice chairman of Egypt’s General Authority for Supply Commodities (GASC) said France remained a stable supplier.
"I am calling for more competition and for French offers to appear more competitively in our tenders," Nomani told a meeting organized by grain lobby France Export Cereales in Cairo.
"Without a doubt, French wheat is one of our more strategic and stable sources," he said.
France exported close to 2.5 million tons of wheat to Egypt in the 2010/2011 season when Russia imposed an export ban in the wake of its worst drought in decades. Russia’s absence for most of the 2010/11 season helped French exports rise 14 percent year-on-year to 19.6 million tons.
Since the start of the 2011/12 fiscal year on July 1, GASC has purchased 2.34 million tons of Russian wheat, 180,000 tons of Romanian wheat and 120,000 tons of Kazakh wheat, according to data collected by Reuters.
GASC said on Saturday it would allow Ukrainian wheat to compete in its international tenders, a move that is expected to add to pressure on French wheat. Nomani said the quality of Black Sea origin wheat had improved since 2008.
"Of course, we look at both quality and price when we make purchases, Black Sea quality has progressed," he said.
"We set high quality specifications and you can’t make offers in the tender except with these specifications but apart from that during the tender, the competition is based solely on best prices," Nomani said.
Russia’s grain export ban had been imposed last year after a catastrophic drought. The country is considering imposing a duty on wheat exports in the current season if exports are too high, the government said on October 11.
GASC has asked the Russians not to impose the tariff.
Higher Egyptian wheat yields
Egyptian Agriculture Minister Salah Youssef Farag said higher wheat yields were expected in the 2011/2012 season, when he expected about 3 million feddans (1.26 million hectares) of land to be planted with the grain.
He said 50,000 feddans would be planted with a higher yielding variety of wheat.
"We expect around 50,000 feddans of the total amount to give us yields of 24 ardebs (140 kg) per feddan," he told reporters on the sidelines of the Cairo meeting, adding that yields last year ranged between 18 to 20 ardebs per feddan.
Egypt raised the price it will pay local farmers for their wheat next season to LE 380 per ardeb from LE 350 during the last season to encourage planting.
The new price is equivalent to about $454 per ton — far above the roughly $250 per ton Egypt paid for foreign wheat at a tender this month.
Local procurement increased in 2011 to 2.6 million tons from 2.1 million tons a year earlier due to higher prices.
"We are very interested in increasing our storage capacity but all plans are still currently under study," Farag said, adding that current capacity was about 4 million tons but that the ideal would be to lift that to 8 million tons.
"I don’t have the capacity to store reserves for one year but then again we don’t produce enough for one year’s consumption," he said.
