"Aesh, Horreya, Adela igtamaya - wa kahraba."
Morsi's biggest mistake. Why the Egyptian Prime Minister was toppled.
Egypt's new supply minister blames stopped wheat imports for Morsi's premature departure. For decades, Egypt has been importing wheat in the order of 10 million tons annually, which the state passes on to the general population in subsidized form for the production of flatbread. Under Morsi's government, regular monthly purchases were stopped for several months (from February to the end of June 2013) under pressure from high wheat prices and increasingly difficult financial circumstances. The reason given was the expectation of higher own harvests and sufficiently high reserve stocks, which should last until the end of the year. However, the company had made more estimates than reliable data.
According to the current findings, only 3.5 to 3.7 million tons instead of 6.5 million tons should still be available in the warehouses. But nobody knows for sure, because the wheat supply system is considered to be corrupt, with everyone who has access taking their share. Nothing has changed in this respect. Smuggling and waste are the order of the day.
The subsidization of bread wheat, in conjunction with the reduction in fuel prices, costs the state a quarter of its budget every year. A noticeable reduction in state subsidies is a highly sensitive issue in Egypt, which has already caused the failure of previous notable prime ministers (Mubarak, Sadat).
In his first days in office, the new Minister of Supply has conducted a number of negotiations on the import of wheat from the Black Sea region. The quantities of the first deliveries are in the order of half a million tons and would initially provide security of supply for two months. Further purchases will follow
Financing remains unclear. There are allusions to loans and aid of 12 million dollars from the Gulf States. Alleged Russian financial aid has been denied. Moreover, the company's own economy would soon recover, so that self-financing would once again be on a secure footing.
The system of issuing smart cards (food cards) will be completed until the situation has stabilized again. The necessary quantities will then be redetermined.
"Aesh, Horreya, Adela igtamaya - wa kahraba." (Bread, freedom, social justice - and electricity)
It is doubtful whether the Egyptian plans can be implemented. In any case, it can be assumed that Egypt's wheat imports will no longer reach the levels of previous years.
In the meantime, China is likely to become the world's largest wheat importer.
