Egypt suspended rice exports less than a week after issuing licences to sell the grain abroad, the head of the rice committee of Egypt’s Agricultural Export Council said on Monday.
“We are of course very upset about this decision, which only serves to confuse the market,” Mostafa el-Naggari told Reuters over the telephone.
On 19 November, Egypt granted licences allowing exporters to sell 102,000 tonnes of white medium-grain rice in a tender. The licences allowed export of rice for a period until 15 January.
The Ministry of Supply has since then suspended exports until all of the domestic needs for the government subsidy programme are met, Naggari said.
Egypt has an exportable surplus estimated at 800,000 tonnes of rice this year.
“Of course there are still a lot of discussions taking place around this. The decision is strange because we already know we have a surplus for exports, so there shouldn’t be a problem,” Naggari said.
Egypt’s local consumption amounts to around 4 million tonnes of white rice a year, of which around 1.1 million tonnes are used for its subsidised rice programme.
“The export halt decision was made by the Prime Minister to ensure that citizens’ local needs of rice are met and at reduced prices,” Mahmoud Diablo, the ministry’s official spokesman said, adding that it would help ensure rice is available for the food subsidy program.
The Ministry of Supply holds tenders to buy rice for the subsidy programme. Rice is sold at the price of 1.5 Egyptian pounds ($0.22) a kilo to over 60 million Egyptians under that system.
Naggari said that Egypt should rely more heavily on imported lower-priced long-grain rice for its subsidy programme and sell its more pricey medium-grain rice abroad for more profit.
“We have to start getting our local consumers used to long-grain rice as it is more profitable to export our medium-grain rice,” he said.
The restrictions on Egyptian rice exports are meant to keep prices in the local market stable, but rice exporters have complained that the ban on free exports has led to the rise of a contraband trade by creating a large price difference between domestic and export markets. ($1 = 6.8877 Egyptian pounds)