CAIRO: Egypt granted 15 companies rice export licenses, a trade ministry statement said Monday, with each license worth between LE 700 and LE 1,250.
This is the first bid for licenses since Minister of Trade and Industry Rachid Mohamed Rachid issued a decree in October allowing for the export of 100,000 tons of rice per month.
The 15 companies will export a total of 13,950 tons from December 1, 2009 and January 1, 2010. Other rice export license tenders are expected to follow soon, the statement read.
Under the amended rice export regulations, a total of 100,000 tons of rice will be exported monthly, and export licenses are issued following a closed-envelope bidding process with an export cap of 34,000 tons per license.
Egypt currently produces an average of 2 million tons of rice per year, the trade ministry said.
“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, the ministry added.
Along with increases in the price of rice to the consumer in the domestic market, the ministry banned rice exports in 2008, but amended the decision in 2009 to allow limited rice exports by producers supplying rice to the national subsidy program.
The new system is intended to put an end to an informal market for export licenses that emerged under the old system when some traders who did not export sold the licenses they obtained in domestic rice tenders to exporters, according to Reuters.
Local prices had tumbled as a result, as traders bid low in state tenders so they could secure lucrative export licenses to sell to others, Reuters reported. -Daily News Egypt
