Less than a month after the decision to open the door to Egyptian rice exports, the cabinet decided on Thursday to re-impose a ban on all exports to all countries. The export ban came as rice traders had started to hold back their supplies to the local market, leading to a surge in prices by LE500 a tonne in less than a month. “I have just bought a kilogramme of rice for LE4.5 compared to LE4 just a few days ago,” a middle-aged female lawyer buying her errands from a Dokki supermarket told Al-Ahram Weekly last week. Almost four days after the re-introduction of the ban, Mustafa Al-Nagari, head of the rice committee at the Agricultural Crops Export Council, said that the price of rice on the local market had retreated by only LE100 per tonne as traders were still hoarding it in the hope that the ban would be lifted again soon. Libya, Turkey, Sudan, Syria and Jordan, along with several Eastern European countries, are the main importers of Egyptian rice. The problem has not only been the rising prices of rice. Many public and private-sector rice mills that had agreed to provide the Supply Commodities Authority (SCA) with rice at the beginning of the month have since refused to deliver it, preferring either to sell it at higher prices on the free market or export it, according to the vice-chairman of the Cereals Chamber of the Federation of Egyptian Industries, Ragab Shehata. Egypt's rice production in 2013 is estimated at 7.5 million tonnes, the result of cultivating 2.2 million acres of land (each acre is equivalent to one feddan). These yielded 4.5 million tonnes of processed white rice, more than enough to cover local consumption estimated at four million tonnes. The rationed allocations of rice stand at some 1.4 million tonnes. The media spokesman for the Ministry of Supply and Internal Trade, Mahmoud Diab, told the Weekly that the decision to lift the ban on rice exports last week had come after making sure that ration needs until the end of this year would be met. Three weeks ago, the SCA had contracted seven state-owned rice mills to supply it with 180,000 tonnes of rice over three months, he said. But private-sector companies that had participated in the last SCA tender at the beginning of last month had stopped sending their 75,000 tonnes to meet SCA needs until the end of this year. Minister of Supply and Internal Trade Mohamed Abu Shadi had tried to get the prime minister's approval to oblige the exporting companies to provide the SCA with a tonne of rice for every tonne they exported as a means to solve the problem, Diab said. Shehata said that even if rice exports had not been banned, the prices would have declined locally in a matter of a few weeks, adding that the decision to start exporting rice had been taken in November when the majority of the importing countries had contracted to buy their rice needs earlier in the harvest season which ends in October. Because of the export fees imposed on exporters, profits would anyway be limited, especially since the price of rice in foreign markets was low, he said, “which means that the rice price in the local market will be similar to that in the foreign.” Egypt was one of the most important rice exporters in the world five years ago, but rice exports declined after the former Nazif government decided to reduce rice-planted areas to save water consumption and rein in the increase in local prices. However, after the 25 January Revolution, illegally planted land increased to 2.2 million acres in 2013, compared to 1.3 million acres in 2010. The Muslim Brotherhood-backed government decided in May 2012 to resume exporting rice, with each exporter being asked to pay LE1,000 per tonne in export fees. In September of last year, Egypt extended the rice-export ban by an additional year to pre-empt domestic supply shortages. Despite the ban, the Egyptian authorities sometimes permit exports to neighbouring countries with pressing needs like the Gaza Strip, Sudan and Libya. The value of Egyptian rice exports in 2009 and 2010, when a ban was imposed on exports, came in at $409 million and $334 million, respectively. There is also a problem with rice-smuggling. Reuters in January quoted a report by an embassy attaché for the US Department of Agriculture that estimated that Egypt would export up to 600,000 tonnes of contraband rice in the marketing year 2011/12, which runs from October to September. This problem last year pushed the government to resort to importing rice.
