CAIRO: The biggest mistake deposed Egyptian president Mohammed Mursi made was stopping wheat imports, Egypt’s new minister of supplies said, pledging to ensure that supplies of a strategic good like wheat do not reach the critically low levels they did during Mursi’s year in office.
Mohamed Abu Shadi, a 62-year-old former police general with a doctorate in economics, said Mursi’s government made “incorrect calculations” regarding Egypt’s wheat stocks. The estimates made by former supplies minister Bassem Ouda, who hails from Mursi’s Muslim Brotherhood, were “based on guesses, not on facts”, Abu Shadi said.
When asked why Mursi’s administration was unable to accurately assess its wheat stocks, a crucial issue for a country where much of the population of 84 million relies on heavily subsidised loaves of bread, Abu Shadi replied: “That was why he left.”
Abu Shadi said Egypt’s current stocks of wheat were enough to last until November 25 adding that after the arrival of 480,000 tonnes purchased this month, Egypt would have stocks to last until the end of the year.
Abu Shadi said the military-backed interim government would aim to increase total stocks to between 5 million and 6.5 million tonnes by the end of Egypt’s current fiscal year next June. He said the government currently had reserves of 3-6 million to 3.7 million tonnes of local wheat and 500,000 of imported wheat.
Abu Shadi is in charge of regulating wheat stocks and dealing with the subsidised fuel and bread system that eats up almost a quarter of the state’s budget.
Bread has long been a sensitive issue in Egypt. Mubarak faced unrest in 2008 when the rising price of wheat caused shortages. Similar problems in the 1970s provoked riots against former president Anwar Sadat.
Egypt is the world’s largest importer of wheat, but it froze its international purchase for months, from February until the eve of Mursi’s overthrow on July 3, hoping for a bigger domestic crop. It was its longest absence from the market in years.
Although it also grows its own wheat, Egypt still needs huge quantities of foreign wheat with higher gluten content to make flour suitable for subsidised bread.
Abu Shadi ordered the purchase of 300,000 tonnes of Romanian, Ukrainian, and Russian wheat on Thursday, his second day in office. It dwarfed a July 2 tender of 180,000 tonnes ordered by his Mursi-era predecessor Ouda.
Mamdouh Abdel Fattah, who managed Thursday’s purchase, said days after Mursi’s overthrow this month that Egypt was unlikely to buy wheat from abroad any time soon. Fattah is the vice chairman of the state grain buying agency, the General Authority for Supply Commodities (GASC). The agency typically announces tenders the night before they occur.
The 300,000-tonne purchase was the new minister’s first step to boost dwindling stocks of imported wheat that Ouda said on July 11 were only enough to last for two months.
Mursi’s ousted government had said it would purchase 4 million to 5 million tonnes of local wheat but had only bought 3.7 million tonnes of home-grown wheat during the harvest which ended last month.
Political turmoil and street violence have steadily driven Egypt into a deep economic crisis, scaring off investors and tourists and draining foreign currency reserves needed to secure critical imports like wheat and fuel.
Abu Shadi said he was optimistic that the economy would begin to recover, saying this would come as the political and security situation stabilised, but did not give details on how the government would pay for his plans for rebuilding stocks.
Reuters
