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April 17, 2008

Egypt to encourage more maize growing, less rice to conserve water

Egypt, Africa's largest rice exporter last year, will reduce the land allocated for planting the grain to save water and encourage farmers to grow more corn, Agriculture Minister Amin Abaza said.

Egypt plans to cut the area from 1.8 million acres (728,434 hectares) planted to the grain in 2007-08, he said. "Rice consumes more water and we want to make sure we are using our water in the most efficient manner possible,'' Abaza said. "Our problem is with water shortages and we need to modernize our irrigation system.''

Abaza's decision, combined with the country's ban on rice exports for the next six months, may further reduce global stockpiles that helped push prices to a record. Egypt exported 700,000 metric tons of the grain, a staple food for half the world, this year.

Rice futures on the Chicago Board of Trade have more than doubled in the past year, and gained 2.2 percent to a record $23.05 per 100 pounds in after-hours electronic trading today on the Chicago Board of Trade.

For Egypt, where 90 percent of the country is desert, scaling back rice planting may not create a shortage because the nation produces more rice than it needs, the minister said. Egypt consumes 3.2 million tons of rice out of 4.6 million tons a year.

The country's rice yield is the highest on record, according to a U.S. Department of Agriculture report in November.

The government will increase plantings of corn by 400,000 acres to 2.1 million acres to boost output and reduce imports, the minister said. The area will increase to 3 million acres in 10 years, he said. "We are net importers of corn, and we want to reduce our imports,'' Abaza said. Egypt imports about 4.5 million tons of the grain boosted by demand from the poultry industry, he said.

Rising food prices around the world have pushed up living costs in Egypt, fomenting social unrest. Seven people have died this year in brawls in bread lines, the government-owned Egyptian Gazette newspaper said April 1.

About 85 percent of the country's bread, of which corn is a key ingredient, is subsidized by the government. Non-subsidized bread and grain prices jumped 27 percent in February from a year earlier, according to the Cairo-based Central Agency for Public Mobilization and Statistics.

Separately, Egypt will import about 7 million tons of wheat this year, unchanged from last year as production will be ``good,'' Abaza said. The country's is the world's second-biggest wheat importer.

Bloomberg


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