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Wednesday, 27 September 2017

El Moselhy announces logistics-focused internal trade strategy at AmCham luncheon

Supply Minister Ali El Moselhy unveiled his ministry’s strategy to overhaul the country’s domestic trade framework at an AmCham luncheon held yesterday. The strategy is particularly focused on logistics for agricultural commodities and appears to draw heavily on years of work on the question funded by USAID.

Cutting spoilage from farm to table: The strategy relies largely on establishing logistics centers — the first of which will be launched in Gharbiya next month — and hypermarket complexes across 22 governorates to reduce the number of times commodities are transported before reaching the end user. Streamlining the process would drive down costs by cutting out middlemen and also push down spoilage, which El Moselhy says currently hovers at 15-20%.

Clear role for the private sector: El Moselhy minister stressed that while he was setting a policy vision, the strategy will be implemented entirely by the private sector. Land for the logistics and market centers will be allocated through public tenders. The strategy comes as part of the ministry’s vision of transforming Egypt into a regional trade destination, the minister added,

Other takeaways from the gathering:

  • El Moselhy said his decision earlier this year to force producers to clearly display prices on their goods was “misconstrued” as requiring them to print the prices on the individual packages. The minister said that he is open to negotiating how the decision is implemented — whether by adding price labels to cartons carrying several packages, or clearly listing the cost on invoices — as long as manufacturers’ suggested retail prices are available somewhere to avoid price-gouging by merchants.
  • El Moselhy again hinted that a new tier-based system may be in the works as the ministry continues to overhaul the subsidy system
  • Sugar reserves are currently “more than enough” to cover 4.5 months’ worth of consumption until production season kicks off in January, so there’s no imminent shortage of the white stuff as was the case last year.
  • The rejection of two wheat shipments (one Romanian and the other French) out of a total of 10-15 since July came simply because the shipments did not meet specs. El Moselhy had said a day earlier that sieving of Romanian wheat had been completed, a statement refuted by Agriculture Ministry source to Reuters. The source said that the decision on what to do with the shipment will be made after the sieving is completed. The government is trying to send the markets a message that everything is under control, one trader said, explaining El Moselhy’s statements.

Separately, El Moselhy announced yesterday that subsidy card holders will only be allowed to receive their daily allocation of subsidized bread from bakeries in the governorate where they officially reside, according to Al Mal.

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