Supply Minister: Safe reserves of strategic goods to meet long-term demands

CAIRO - 19 February 2020: Supply Minister Ali el Moselhi said Wednesday that about 72 million citizens benefit from the ration cards system, which is a main factor of food safety particularly for most-in-need segments.

In an interview with MENA board chairman and editor- in-chief Aly Hassan, Moselhi said his Ministry acts to secure strategic reserves of basic commodities atop of which wheat, sugar, oil, rice, macaroni, meat, chicken and fish.

This is meant to maintain a stable market at times of global slumps, Moselhi said.

He touched upon a plan to secure strategic reserves for not less than three months.

Egypt's strategic reserves of wheat, for example, should be sufficient for more than four months, the minister said.

He also cited reserves of sugar that are expected to meet citizens' demands for more than five months.

Moselhi added that the strategic reserves of oil will be enough for over three months.

Self-sufficiency of rice could be achieved through cultivating 1.3 million feddans, Moselhi said, adding that purchase contracts should continue until October.

He said wheat is being cultivated over 3.3 million feddans.

The Supply Ministry is acting to secure commodities and closely and effectively monitor the market, Moselhi said, adding that this is done in cooperation with the private sector.

The government is working with the private sector to close a gap in sugar production that ranges between 600,000 to 700,000 tons, he made it clear.

Moselhi stressed the need to control the market through providing high quality products and maintaining prices.

The supply minister said that the food subsidy cards represent one of the most important systems in the state, in which 33,000 groceries are engaged plus 32,000 bakeries in addition to 1,300 outlets distributing subsidized goods.

Regarding procedures taken to filter the subsidy cards, the minister lauded the role played by the ministries of communications and military production as well as the Administrative Control Authority which, he said, have cooperated with his ministry to compile and check databases needed for the move.

The Supply Ministry targets buying four million tons of locally-cultivated wheat, the minister said.

Moselhi pointed out that his ministry has a wheat storage capacity of about 3.4 million tons, marking a great leap in the storage process for grains.

The Supply Ministry has a strategy to develop the affiliates of the Holding Company for Food Industries, he said, adding that a consortium has been formed to evaluate their untapped assets and human capacity and conduct financial analysis, with the studies to be finalized within two months.

The ministry will seek the help of international experts in evaluating and restructuring the Egyptian Sugar and Integrated Industries Company, he said.

Regarding news being recently circulated about the Supply Ministry's approach to offer cash subsidy to citizens instead of the subsidized commodities, he said that the mission of his ministry is to upgrade the subsidy system and ensure its effectiveness.

He voiced his support to a proposal for offering conditional cash support on subsidy cards enabling citizens to buy about 21 kinds of goods.

He said that his ministry is working to re-engineer the entire bread production and distribution system.

Moselhi said the Sypply Ministry is working on updating the mechanized bread distribution system, noting that around 275 million loaves of bread are produced daily by the bakeries affiliated to the ministry. He also said that work is going on to expand the processing and storage capacities as well as the distribution network.

He asserted that the ministry is still receiving complaints over mistakes in the bread distribution system, adding that around 4 million complaints have already been addressed and resolved.

The minister highlighted the role of the high committee on social justice which has determined the criteria for removing some beneficiaries from the ration card system. The committee has excluded the persons and families whose consumption of electricity exceeds 1,000 kilowatts per month and whose children's school fees exceed EGP 60,000 per year along with those families who pay phone bills of more than EGP 800 per person on a monthly basis, he said.

The minister underlined the importance of the subsidies file, adding that rich countries are still backing the most needy categories of the society, citing the example of the US "Food Stamps" initiative. He said the total value of the state's subsidy system is estimated at EGP 320 billion, including around EGP 89 billion allocated for the supply ministry according to this year's state budget. He also noted that the subsidies of bread reached EGP 53.5 billion, while allocations for other goods are estimated at EGP 35.5 billion.

The state's subsidies are also targeting other sectors such as housing, energy, Takaful and Karama (a state-sponsored social support programe) as well as other services, Moselhi added.

Supply Minister Ali Moselhi reviewed efforts to establish an Egyptian commodities bourse, considering this as an important step for the Egyptian market.

He added that the prime minister issued a decision concerning the establishment of an Egyptian commodities bourse company with the participation of a number of governmental authorities, including the General Authority For Supply Commodities (GASC).

The company – to start with a capital of EGP 100 million - will be set up in July or August, he said.

He added that the company, which will be in charge of managing the Egyptian Commodities Exchange, will depend on the data being collected on the production and consumption of each commodity in Egypt.

Asked about the ministry’s plan to establish a unified company for transporting commodities, he said transportation is of high cost and this underscores the importance of establishing such a company.

He said the ministry is awaiting the cabinet’s approval for establishing the company to be in charge of transporting commodities, especially the strategic ones.

Asked about the ministry’s plan to face up any price fluctuations in the international markets, especially with regard to strategic commodities, he said having strategic reserves and being aware of any changes or price fluctuations in the global market are important to be able to handle commodities’ prices in the local market and to mitigate the impact of any sudden global market volatility.