Egypt wants to double the capacity of its wheat silos in the next three or four years and is considering changing a bread subsidy mechanism to prevent smuggling or illegal trade in subsidised grain, the state's main wheat buyer said on Wednesday.
Egypt's new government has been looking at ways to better target subsidies and reduce waste as it seeks to plug a big budget deficit that ballooned as investors fled in the wake of the uprising that toppled Hosni Mubarak last year. However, while the government is seeking to cut back on at least some energy subsidies, there is no talk of cutting supplies of subsidised bread, a politically sensitive issue, even if the mechanism for keeping loaves cheap could be changed.
Egypt now has 25 wheat silos each with capacity for 30,000 tonnes and aims to double that number, Nomani, vice chairman of the General Authority for Supply Commodities, said at a grain conference in the Red Sea resort of Sharm el-Sheikh. That would suggest boosting storage capacity to 1.5 million tonnes from 750,000 tonnes now.
"We are ... concerned with storage especially as local wheat supplies increased this year," he said. "We have a project to raise the number of silos to 50 from the 25 we have this year." Egypt, the world's biggest wheat importer, bought 3.7 million tonnes of wheat from local farmers this year, Nomani said. Many Egyptians depend on the subsidised saucer-sized flat loaves selling for just 5 piastres (less than 1 US cent).
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