Following a summer of skyrocketing prices, a government decision banning rice exports brings optimism that the consumer price of this essential staple will come down to reasonable levels, Mona El-Fiqi reports For the third consecutive year the government has taken a decision to extend the rice export ban in an attempt to control prices in local markets by providing more supply than demand. On 23 September, Minister of Trade and Industry Rachid Mohamed Rachid issued Ministerial Decree 829/2010 to ban rice exports until October 2011. The aim of the decision is to increase the supply of local market needs at reasonable prices particularly after the government's application of an agricultural plan to reduce the areas of rice cultivation. Aiming at saving scarce water resources, the government reduced areas where rice cultivation is permitted from 2.2 million feddans in 2008 to 1.8 million feddans in 2009 to reach 1.1 million feddans in 2010 in the Nile Delta. To control rice prices in local markets, the Ministry of Trade and Industry first banned rice exports in 2008. The ban has now been extended to October 2011. The ban was welcomed by consumers who expressed their hope that it might lead to a reduction in rice prices. Samar Metwalli, a housewife and mother of three children said: "Any efforts taken by the government to reduce prices which skyrocket are welcomed by consumers who cannot do anything to fight high prices of almost all products." Both consumers and experts welcomed the decision. Ali Sharafeddin, chairman of the Grains Industry Chamber at the Federation of Egyptian Industries (FEI) said he expects the ban to balance prices. "In response to the decree, the price of rice was reduced by LE300 per tonne the same day the decision was taken," said Sharafeddin. According to Sharafeddin, prices will not exceed LE3.5 per kilo during the coming period, since rice production is approximately 3.7 million tonnes while local consumption is three million tonnes. As for the amounts remaining after local consumption is fulfilled, Sharafeddin said that when stability is achieved in rice prices at the local market, the chamber will submit a memo to the Ministry of Trade and Industry requesting to export the extra amounts. During the two past seasons the Ministry of Trade and Industry allowed rice exports of quantities exceeding local needs, which are expected to reach about 700,000 tonnes this year. Ragab Shehata, head of the rice division at the Grains Industry Chamber of the FEI, agreed with Sharafeddin that the decision will bring rice prices down in the coming days "because the market will be saturated with rice," Shehata said. The problem, according to Shehata, is that producing rice has become unprofitable to farmers who only cultivate rice to refresh their land and clean it from harmful residues. "In September of last year, the price of rice stood at LE800-1,100 per tonne. This year, before the banning decision the tonne cost LE1,750. After the ban, it stands at around LE1,550, which I believe is fair enough for all parties including farmers, consumers and the General Authority for Supply Commodities," Shehata concluded. Additional reporting: Ahmed Kotb
