by Ahmed El-Mahdi
The Ministry of Industry, Trade and Small and Medium Enterprises said that the decision to halt the export of all types of rice late last week aims to meet the needs of the local market and the General Authority for Supply Commodities.
The Rice Export Committee at the Agriculture Export Council said that what is being exported is the surplus which is not less than one million tons.
The decision, as stated by the Rice Section of the Chamber of Cereals Industry at the Federation of Egyptian Industries, will eliminate investments worth EGP40 billion and lead to laying off half a million workers.
Head of the Rice Section Ragab Shehata said the sector addressed the Ministry of Industry to allow the export of rice with the modification of mechanisms used last season, which did not bear fruit, so that the local market prices would not collapse in a way that could lead to the closure of a total of 2,000 mills.
The decision threatens investments amounting to EGP40bn, which is the total investment value of mills, which would lead to rendering around 500,000 workers jobless, he said, adding that only 10 per cent of mills are operating and 90 per cent have been closed due to the state of stagnation prevailing in the market.
The capacity of mills reaches 20 million tons, but the produced barley rice hits seven million tons and yields four million tons of white rice, three million tons of which reach the local market annually, which leaves a surplus of one million tons of white rice, Shehata said.
Allowing the export of the surplus would maintain the price of white rice, one ton of which is worth EGP300,000, he said, adding that the state obtains fees for exports amounting to $280. “However, we asked that the fees be lowered to $200 so that there would be competition on the foreign markets,” he said, adding that prices are expected to reach less than EGP2,500 per ton if the surplus was not exported.
Meanwhile, head of the Rice Committee at the Agriculture Export Council Mostafa al-Naggari said the government has shocked the sector with decision no. 606, published in the official Gazette, on halting rice exports except for broken rice. The decision drops barley rice processing over the coming three months to EGP1,650 per ton, which currently stands at EGP1,700-1,800, 20 per cent less than last year.
He voiced surprise over the government’s decision despite the council’s presentation of all information that reveals the inadequate mechanisms that led to exporting only 32,000 tons out of a total surplus of one million tons during the last season.
The committee chairman called on the government to swiftly intervene to purchase half a million tons of the crop to avoid the expected deterioration of barley rice this season, pointing out that there is no export with the weak consumption of supply which makes it difficult to continue with the current conditions as the losses will be grave.
Based on article no. 29 of the constitution, the state has to purchase agricultural crops, but actually it only bought 100,000 tons from a total of 8.6 million tons last year. The decision on halting exports is not applicable to export licenses issued in conformity with decision no. 776, which expired on 31 August.
al-Naggari called for the need to reconsider the decision and to carry out a thorough study of the entire situation. The surplus this year is expected to reach 1.2 million tons, representing the surplus of last season and this year together.
