The cabinet recently approved the resumption of rice exports and the lifting of a rice-export ban in a bid to market a surplus of domestically produced rice abroad and regain Egypt's position in international markets for medium-grain rice. Minister of Supply and Internal Trade Khaled Hanafi announced last week that the government is allowing rice exports to take place on specific terms. Exporters will be allowed to export rice provided that they sell the government one ton of rice at LE2,000 for every exported ton, in addition to paying $280 per ton in tariffs, he said. This will help the government supply its needs of 1.3 million tons of rice annually for its subsidy programme directed at nearly 70 million people. In a statement, Hanafi said that the decision will also help reduce rice prices delivered to the General Authority for Supply and Commodities (GASC). Rice exports were expected to reach around one million tons with a total value of $1 billion, he said. Those sales will add some $280 million in tariffs to state coffers. The ban on rice exports has been imposed and lifted several times over the last six years with the aim of ensuring that production meets domestic needs. The longest ban lasted for four years and ended in October 2012. Egypt exported 650,000 tons of rice to 58 countries in Europe and the Arab region in 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 local needs. Due to an increase in the area cultivated to 795,000 hectares in 2014-2015 from 790,000 hectares the previous year, the rice harvest is expected to reach some seven million tons. After processing, this should yield five million tons of white rice. Annual local consumption stands at some 3.3 million tons, and the difference of over one million tons could be available for export. After studying the situation, the government took the decision to lift the ban on exports, but rice exporters have said that the conditions it is imposing will hinder exports. Mustafa Al-Naggari, a board member of the Agricultural Exports Council and head of the council's rice committee, told Al-Ahram Weekly that the move to open the door for exports is welcomed by exporters, but that some of the terms set by the ministry are not feasible. “The decision to pay $280 as a tariff per ton is fine, but selling the government one ton at LE2,000 will be very difficult,” Al-Naggari said. Exporters said that the government should not force them to sell rice domestically at LE2,000 per ton when the actual price is LE3,200 per ton, causing the farmers huge losses. Al-Naggari said that the ministry set the conditions after estimating the international price at $1,000 per ton, which was not accurate. Egyptian exporters could hardly export rice at $800 per ton, he said, explaining that rice prices on the international markets previously soared by 30 per cent, reaching $1,000 per ton due to Egypt's ban on rice exports, but that since the lifting of the ban prices had come down. He said that the decision to lift the ban should be limited in time in order not to negatively affect the local market. In the meantime, he urged the government to set an acceptable price for other crops, such as corn, which Egypt is currently importing. This price should be announced before the cultivation season starts, as was the case with wheat, in order to encourage farmers, he said. “Poor marketing of summer crops such as cotton and corn has pushed some farmers to cultivate rice, violating the rice-cultivation area regulations set out by the Ministry of Agriculture,” he said. Egyptian rice is in demand internationally, particularly in Arab countries, Turkey and Eastern Europe. Before the ban on rice exports in 2008, the country's annual rice exports reached 1.26 million tons.
