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Fraudsters fleece Egypt using foreign wheat
Top wheat importer Egypt's decision to increase the price premium paid to its own farmers has given fraudsters a golden opportunity to pass off cheap foreign grain as locally grown and profit at the country's expense.
June 2, 2012 8:00 by Reuters
ACairobased trader underlined the inconsistency between large reported local grain purchases and the diesel shortage.
“They (local farmers) would need a lot of diesel to power the machines for harvesting, and when you think of it there have been shortages in the country, where are they going to get all this energy to harvest 2 million tonnes? It doesn’t add up,” the trader said.
“The origins can be anything ranging from Argentine to Russian, they are all cheaper than the local procurement price.”
An official from the Ministry of Supply and Domestic Trade, who asked not to be named, outlined steps being taken against internal smuggling but accepted that it would be difficult to halt.
“Of course I’m expecting there will be smuggling, it’s been happening for years and there’s no reason why it shouldn’t happen this year,” the official said.
The ministry official said the government has tried to control questionable claims partly by clamping down on small farmers selling disproportionately large quantities of wheat.
“Now when we come to buy the wheat from the farmers, we require to see documentation to see how much land he owns.”
Traders said the profits were split between the importers and farmers along with others in the supply chain.
Egyptis forecast to consume 18.9 million tonnes of wheat in 2011/12, up from 17.7 million tonnes the previous year, according to U.S. Department of Agriculture data.
The North African country, which has one of the highest per capita rates of consumption at about 180 to 200 kg of wheat a year, imports half of its needs.
The General Authority for Supply Commodities (GASC), the state’s main grain buyer, is responsible for the majority ofEgypt’s wheat imports.
GASC is also in charge of procuring wheat from local farmers, starting around April until July. Egyptian wheat is planted in October and November and harvested in April and May.
The country has consistently imported between 10 and 11 million tonnes of wheat for the past three years, according to International Grains Council data. (Reporting by Sarah McFarlane; Editing by Veronica Brown and Anthony Barker)
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