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Monday, 17 July 2017

Overhaul of bread subsidy system unlikely to change how much wheat Egypt imports

Overhaul of bread subsidy system unlikely to change how much wheat Egypt imports: The Ismail government’s overhaul of its bread subsidy program is unlikely to lead to any significant change in how much wheat Egypt buys on the international market, traders and analysts tell Bloomberg. “Import demand will be the same as people still need to consume wheat and flour and Egypt’s bread consumption is one of the highest in the world,” CEO of Roots Commodities in Egypt Haitham Nouh said. “We expect import volumes to stay normal and any increase in wheat imports will only be a reflection of the increase in population.” Nouh also believes the political sensitivities underlying the bread subsidy program would mean that the pace of reforming the system will be gradual, and hence unlikely to impact wheat imports significantly. Last Wednesday, the Supply Ministry had announced it is ending subsidizing the production of flour and will only subsidize the production of bread beginning in August. A few days prior to announcing the decision the Supply Ministry said that it will increase wheat imports in FY2017-18 to 6.2 mn tonnes from 5.5 mn tonnes during the previous fiscal year.

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