The government's recent lifting of the ban on rice exports from Egypt has not had the effects intended, critics says, since the harsh conditions for such exports still limit activity and encourage local sales, Hayat Hussien writes. As a result, members of the Rice Producers Division at the Federation of Egyptian Industries have sent a memo to the Minister of Supply asking him to increase the price the ministry is prepared to purchase their production for by 50 per cent to LE3,000 per ton. The memo came after meetings of members of the division to discuss means of absorbing excess rice production locally after the lifting of the export ban proved to be “cosmetic”. Two weeks ago Khaled Hanafi, the minister of supply, approved plans to allow the export of rice, bringing Egypt, a major medium-grain rice exporter, back into the international market for the first time since 2013. However, the conditions for exporting have been tough enough to limit exports so that they will not exceed 10,000 tons, according to Ragab Shehata, head of the Rice Producers Division. While Egypt produces six million tons of rice each year, annual local consumption stands at some 3.3 million tons. Under these conditions, traders are allowed to export rice provided that they sell one ton of medium-grain rice at LE2,000 for every ton of rice they export to the government's General Authority for Supply Commodities (GASC). Exporters also has to pay a tariff of US$280 per ton exported. The measures are intended to help the government supply its needs of 1.3 million tons of rice annually for its subsidy programme directed at nearly 70 million people. Mahmoud Diab, a ministry of supply spokesman, told Al-Ahram Weekly that the ministry could not change these conditions as they had been agreed to by the cabinet. Moreover, although the new subsidy system freed the prices of commodities, the ministry of supply needed to maintain the prices of main staples like rice, he said. Diab explained that as ministry outlets sold rice at a 50 per cent discount on its market price, the ministry should be able to buy rice at “reasonable prices.” The prices of locally sold rice have not increased despite the decision to lift the exports ban, a fact that Shehata attributed to the large rice surplus of around one million tons. The ban on rice exports has been imposed and lifted several times over the last six years, with the longest period during which exports were banned lasting for four years and ending in October 2012. Exports were halted again a year later and the export ban has remained in force ever since. However, this year locally produced rice is expected to exceed market needs. Due to an increase in planting areas to 795,000 hectares in 2014-2015, from 790,000 hectares the previous year, the harvest is expected to reach some seven million tons. This can be added to the one million tons remaining from last year's harvest. After processing, the harvest will yield five million tons of white rice. In 2012, Egypt exported 650,000 tons of rice to 58 countries in Europe and the Arab region. The country's annual rice exports reached 1.26 million tons before the first export ban in 2008 that ended in 2012. The writer is a freelance journalist.
