Encouraged by a surplus in this year's harvest, together with a hike in international prices, the government is reconsidering its ban on rice exports. Khaled Hanafi, minister of supply and internal trade, said recently that if the ban is lifted the ministry will apply strict rules to guarantee the availability of rice to cover local demand. This includes the 1.3 million tons needed annually to provide the rice distributed on the country's subsidy system, he said. 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 area to 795,000 hectares in 2014-2015 from 790,000 hectares in 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. Annual local consumption stands at some 3.3 million tons. Rice prices on the international markets have also soared by 30 per cent, reaching $750 per ton. Egyptian rice enjoys high market demand, particularly in the Arab countries, Turkey and Eastern Europe. The Federation of Egyptian Industries (FEI) met last week to discuss the issue and decided to present a request to the government to open the door to milled white rice exports. The FEI issued a statement recommending an increase in export fees on rice exports from $140 to $250 per ton. This would add the equivalent of LE1.5 billion annually to the government's coffers, it said. Allowing rice exports will help farmers earn higher profits and introduce better agricultural practices. It will also discourage the illegal smuggling of rice, which leads to losses in export fees. The FEI statement highlighted the importance of opening the door to importing raw rice in order to help local mills operate at full capacity, estimated at 15 million tons a year. Egypt's mills currently refine eight million tons of rice a year. When operated at full capacity, the mills yield profits of $100 to $150 per ton, or $1 billion annually. The FEI also called for penalties to be applied against people who violate rice-cultivation regulations, which can lead to wasting water. “The poor marketing of summer crops such as cotton and corn has pushed some farmers to cultivate rice, even if they violate the rice-cultivation area regulations set out by the Ministry of Agriculture,” the Egyptian Businessmen Association (EBA) said in a press release issued last week. The EBA, after analysing the issue over recent months with other parties, now recommends that the ban on rice exportation be lifted. It also called for allowing rice imports, as it is expected that the local market will soon start depending on imported long-staple rice due to the difficulty of providing large amounts of water to cultivate the local short-grained variety. Ashraf Kamal Abbas, a professor of economics at Mansoura University, said that it is important to export rice in order to maintain Egypt's position in international markets. “Egyptian rice is in high demand in many countries, such as Jordan and the Gulf States. However, the government should install export quotas in order to keep the availability of rice at reasonable prices in the local markets,” Abbas said. He said that the rice harvest changes each year, so care will be needed in setting such quotas on an annual basis. Due to the ban on rice exports, Egypt has lost much of its share in international markets, leaving room for the US and Russia to sell their produce to countries previously dependent on Egyptian rice, such as Turkey. According to Abbas, however, Egypt could regain its importance as a rice exporter, particularly to the Arab countries. In the wake of the political turmoil in Syria, Jordan submitted an official request to the Egyptian government to exclude it from the export ban in order to meet the demand for rice previously covered by Syrian exports, for example. While experts believe that the move is necessary for Egypt to regain lost markets, consumers are worried that permitting rice exports could negatively affect the local market and prices. “Exporting rice means smaller amounts in the local markets, and this will lead to higher prices,” said Magda Mahmoud, a housewife. “Rice is an essential commodity for my family, and if the ban is lifted demand will exceed supply.” Rice is currently sold at an average price of LE5 per kg in local markets.
