EGYPT: The biggest mistake deposed Egyptian President Mohamed Mursi made was stopping wheat imports, Egypt's new minister of supplies says / Mohamed Abu Shadi pledges to ensure supplies of essential goods such as wheat

Record ID: 837783

  • Title: EGYPT: The biggest mistake deposed Egyptian President Mohamed Mursi made was stopping wheat imports, Egypt's new minister of supplies says / Mohamed Abu Shadi pledges to ensure supplies of essential goods such as wheat
  • Date: 21st July 2013
  • Summary: CAIRO, EGYPT (JULY 21, 2013) (REUTERS) VARIOUS OF PEOPLE AND TRAFFIC ON CAIRO STREET CAIRO, EGYPT (JULY 20, 2013) (REUTERS) EGYPTIAN MINISTER OF SUPPLIES, MOHAMED ABU SHADI CLOSE OF EGYPTIAN FLAG (SOUNDBITE) (Arabic) EGYPTIAN MINISTER OF SUPPLIES MOHAMED ABU SHADI, SAYING: "The stock of wheat we have is enough to supply us until November 25th. There are 180, 000 tonnes coming from Uzbekistan and yesterday we reached a deal for another 300, 000 tonnes from former Soviet Union states, this will cover us until the end of December." CAIRO, EGYPT (JULY 21, 2013) (REUTERS) TRUCK WITH BAGS OF FLOUR OUTSIDE BAKERY VARIOUS OF MEN CARRYING BAGS OF FLOUR INTO BAKERY CAIRO, EGYPT (JULY 20, 2013) (REUTERS) (SOUNDBITE) (Arabic) EGYPTIAN MINISTER OF SUPPLIES, MOHAMED ABU SHADI, SAYING: "My most important priority is to make sure that we continue to make available strategic stocks of the important supplies and to make sure we are always within the safe boundaries. Second of all, to protect the subsidies and to make sure the system reaches those who need it. Thirdly, to reorganise the way the ministry works." CAIRO, EGYPT (JULY 21, 2013) (REUTERS) VARIOUS OF BAKERS PREPARING DOUGH TO BAKE BREAD, MACHINE KNEADING DOUGH, DOUGH READY FOR BAKING CAIRO, EGYPT (JULY 20, 2013) (REUTERS) (SOUNDBITE) (Arabic) EGYPTIAN MINISTER OF SUPPLIES, MOHAMED ABU SHADI, SAYING: "I believe the International Monetary Fund loan is still being discussed and it will be an addition to the national economy. At the same time, today the Arab subsidies have not taken the place of the Monetary Fund, but they have filled a large gap until we end our negotiations with the IMF." CAIRO, EGYPT (JULY 21, 2013) (REUTERS) BAKER PLACING DOUGH IN OVEN VARIOUS OF HOT BREAD COMING OUT OF OVEN CAIRO, EGYPT (JULY 20, 2013) (REUTERS) (SOUNDBITE) (Arabic) EGYPTIAN MINISTER OF SUPPLIES, MOHAMED ABU SHADI, SAYING: "The reason we get subsidies is because there are people who are unable to manage life, so we help them, it is difficult because they have a small income. Now the national economy as a whole will get better and we will help by designating a minimum and a maximum for salaries. This will be a foundation for restructuring the economy in addition to the return of political and security stability." CAIRO, EGYPT (JULY 21, 2013) (REUTERS) VARIOUS OF BREAD STACKED UP ON SHELVES MAN BUYING BREAD FROM BAKERY
  • Embargoed: 5th August 2013 13:00
  • Keywords:
  • Location: Egypt
  • City:
  • Country: Egypt
  • Topics: Business,Economy,Politics
  • Reuters ID: LVABQKGUF4CT9PZH3PL9EID940EM
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  • Story Text: The biggest mistake deposed Egyptian President Mohamed Mursi made was stopping wheat imports, Egypt's new minister of supplies said, pledging to ensure that supplies of a strategic good like wheat do not reach the critically low levels they did during Mursi's year in office.
    Wheat stocks are a crucial issue for a country where much of the population of 84 million relies on heavily subsidised loaves of bread.
    Mohamed Abu Shadi, a 62-year-old former police general with a doctorate in economics, said Mursi's government made "incorrect calculations" regarding Egypt's wheat stocks.
    Abu Shadi said Egypt's current stocks of wheat were enough to last until Nov. 25 adding that after the arrival of 480,000 tonnes purchased this month, Egypt would have stocks to last until the end of the year.
    "We have the stock of wheat is enough to supply us until November 25th. There is 180,000 tons coming form Uzbekistan and yesterday we cut a deal regarding 300,000 tons form former soviet union states, those will cover us until the end of December," Abu Shadi said.
    Sworn in last week as part of the military-backed interim government running the country, Abu Shadi is in charge of regulating wheat stocks and dealing with the subsidised fuel and bread system that eats up almost a quarter of the state's budget.
    Bread has long been a sensitive issue in Egypt. Mubarak faced unrest in 2008 when the rising price of wheat caused shortages. Similar problems in the 1970s provoked riots against former President Anwar Sadat.
    Abu Shadi said his main priorities were to make sure supplies reach those who need them and to make his ministry run smoothly.
    "My most important priority is to make sure that we continue to make available strategic stocks of the important supplies and to make sure we are always within the safe boundaries. Second of all, to protect the subsidies and to make sure the system reaches those who need it. Thirdly, to reorganise the way the ministry works."
    Egypt is the world's largest importer of wheat, but it froze its international purchases for months, from February until the eve of Mursi's overthrow on July 3, hoping for a bigger domestic crop. It was the country's longest absence from the market in years.
    Although it also grows its own wheat, Egypt still needs huge quantities of foreign wheat with higher gluten content to make flour suitable for subsidised bread.
    Abu Shadi ordered the purchase of 300,000 tonnes of Romanian, Ukrainian, and Russian wheat on Thursday, his second day in office. It dwarfed a July 2 tender of 180,000 tonnes ordered by his Mursi-era predecessor Ouda.
    Abu Shadi said he was optimistic that the economy would begin to recover, saying this would come as the political and security situation stabilised, but did not give details on how the government would pay for his plans for rebuilding stocks.
    He said he did not have details of his ministry's budget, but said that a recent package of $12 billion in loans and grants from Gulf nations was enough to support Egypt through the transition, echoing similar comments by the new planning minister last week.
    "I believe the International Monetary Fund loan is still being discussed and it will be an addition to the national economy. At the same time, today the Arab subsidies have not taken the place of the Monetary Fund, but they have filled a large gap until we end our negotiations with the IMF."
    Abu Shadi said he would work to boost next season's local wheat harvest, which runs from April to June, to reduce dependence on imports.
    In his previous work as a senior official in the Supplies Ministry, he built a reputation for targeting theft and corruption in a subsidies scheme that is notorious for being abused.
    But the current state of the supply system shows that his efforts had limited success. Bread and fuel subsidies eat up more than 106 billion Egyptian pounds ($15.14 billion) annually.
    Despite his plans to purchase more imported wheat and increase local production, Abu Shadi did not reveal any parallel plans to clamp down on waste and losses in the supply system that could help to plug a budget deficit that has ballooned since the 2011 uprising.
    Reform of the broken system was viewed as a prerequisite to securing a $4.8 billion loan from the International Monetary Fund that Mursi's administration had sought this year.
    Months of talks ran aground with the government unable to agree to steep cuts to the unaffordable food and fuel subsidies.
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