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EGYPT: Fears of a food crisis after Russia's wheat export ban

August 8, 2010 |  8:44 am

Art-egypt-bread-apRussia's decision to ban grain exports is fueling anxiety among Egyptians that an international wheat crisis could lead to massive food shortages in the Arab world's most populous country.  

Egypt is the world's top wheat importer, annually buying 6 million to 7 million tons from the international market. About 50% of that comes from Russia. However, record high heat, accompanied by wildfire and drought, has forced Moscow to abandon its commitments on wheat exports in order to protect Russian needs. That means Egypt will not receive 540,000 tons of wheat that was scheduled for delivery by Sept. 10.

Nomani Nomani, head of the General Authority for Supply Commodities, has tried to downplay concerns of a potential food shortage. Nomani said Egypt has a four-month stockpile of wheat for local markets, and that the government will purchase an extra 60,000 tons a month from other countries.

Nonetheless, Ali Sharaf Eddin, head of the Egyptian Chamber for Cereal, said the government is to blame for  producing only about 8 million tons of domestic wheat a year. "Now the country's treasury will have to spend an extra 5 billion Egyptian pounds to cope with the international increase in wheat prices," he said.

Egyptians' greatest fear is a possible increase in the price of subsidized wheat products, such as bread, which are heavily relied upon by millions of poor citizens. According to U.N. figures, one-fifth of Egypt's population of 80 million are living on less than $1 per day.

"We have no intention of raising the prices of subsidized commodities," said Ali Moseilhi, Minister of Social Solidarity. 

International markets have already witnessed a 40% increase in wheat prices. The United Nation's Food and Agriculture Organization, FAO, warned of "serious implications for world wheat supplies in 2010/2011 should the Russian drought continue."

In 2007, wheat prices tripled worldwide and resulted in vast shortages of subsidized bread across Egypt. Several people died as thousands fought in lines outside public bakeries for limited amounts of bread, forcing President Hosni Mubarak to order military intervention to end the conflict.

-- Amro Hassan in Cairo

Photo: Bread lines in Egypt. Credit: Associated Press