Egypt Bans Domestic Trading of Imported Wheat

A farmer tends to a wheat field in the El-Dakahlia governorate, north of Cairo, Egypt, in this February 16, 2016 file photo. Egypt has banned the domestic trading of imported wheat. REUTERS/Mohamed Abd El Ghany/Files To match Special Report EGYPT-WHEAT/CORRUPTION

CAIRO, April 6 – Egypt has banned the trading of imported wheat inside the country, Supply Minister Khaled Hanafi said on Wednesday, a move which could reduce smuggling of the grain that cost the country hundreds of millions of dollars last year.

Egypt, the world’s largest wheat importer, annually fixes a local procurement price for Egyptian wheat that is above global prices in an attempt to encourage farmers to grow the crop.

As Reuters detailed in a special report in March, the higher local price led to record smuggling last year of cheap foreign wheat passed off as local crop. The wide scale fraud cost Egypt nearly 2 billion Egyptian pounds in public funds ($225 million).

Those caught trading imported wheat domestically will be subject to a jail sentence of six months to one year and a fine of 500 to 1,000 Egyptian pounds ($56-$113), the statement said.

Egypt’s wheat harvest begins in April and runs through July. Last year the government said it procured a record 5.3 million tonnes of the grain, up from 3.7 million tonnes the year before.

Industry sources say that roughly 2 million tonnes of last year’s procurement actually came from abroad.

($1 = 8.8799 Egyptian pounds)

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