CAIRO: Following Russia's decision to ban wheat exports, Egypt witnessed a state of fear and debate, despite Government assurances that the impacts would be limited. Egyptians fear that an international wheat crisis could lead to wheat shortages and hikes in prices of bread and grains. Egypt is the world's top wheat importer, annually buying 6 to 7 million tons from the international market. About 50 percent of that wheat had been coming from Russia. Egypt was scheduled to receive around 540,000 tons of Wheat from Russia by the Middle of September, but Russia – the third largest exporter of wheat – announced a decision to ban exports of wheat and derived products until the end of the year because of the wildfire that broke out last week following the intense heat wave that damaged crops, adding to the high wheat prices in world markets. To save its needs, Egypt government is to re-think of other exporters. The Minister of Industry and Commerce, Rashid Mohamed Rashid stressed Egypt's ability to face the ban on exports of Russian Wheat, in the coming months thanks to its inventory and variety of sources. The Minister said that Egypt has a stock which guarantees the production of subsidized bread for the next four months. He also pointed to the importance of the policy of diversification of sources followed by Egypt in this vital sector as it bought on Saturday 240 000 tons of wheat from France. Another statement by the Chairman of the Chamber of Grain Industry – Aly Sharaf El-Din – came in agreement with the minister's, Sharaf El-Din mentioned in his statement other alternatives such as France, Germany, Canada, Australia from which Egypt could supply its needs of wheat. The Minister added after the emergency meeting held by the ministry that the decision to ban the export of Russian wheat would have a negative impact on the state budget as the additional cost of rising wheat prices, He estimated the impact of the changes on Egypt's budget for the year 2010/2011, which began in the month of July at between 400 to 700 million dollars. The minister added that Cairo had decided to stop importing wheat from countries such as Ukraine, Kazakhstan, waiting to know the impact of drought on their policies of exporting in these two countries. A statement in contradiction with the fact that Ukraine, another major exporter was the one who canceled several wheat export contracts due to lack of supply from farmers and other issues, while Kazakhstan still in perplexity either to go on an exports ban or not. Also Floods in Canada reduced wheat supply and driven up costs. On the other hand, a study released by the Agricultural Research Center said that wheat consumption by Egyptians, is estimated at 13.7 million tons each year, making the Egyptian Citizen one of the most excessive consumer of wheat in the world, a quantity of up to 148 kilograms per year. According to UN figures, one-fifth of Egypt's 80 million strong population survive on less than $1 per day, and this crisis warns of a possible increase in the price of subsidized wheat, yet the Government denies a possible increase, while Rashid admitted that the Egyptian people are concerned about the consequences of this situation during the month of Ramadan, which brings the general consumption of bread, however, he stressed that it would not have any effect on the month of Ramadan, which starts this Wednesday. ** Assem Hendawi contributed to this report. BM
