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Egypt, U.S. discuss developing economic aid program
Minister of International Cooperation Sahar Nasr met Monday with a U.S. delegation, where they discussed Egyptian people’s needs and priorities, read a statement.
Nasr told the delegation that there is a need to develop the U.S. economic aid program to Egypt in the line with the public needs and the priorities of the government agenda.
EGX opens on varied notes Tuesday
The Egyptian Stock Exchange opened Tuesday at varied notes with the main index slightly declined by 0.07 percent, Youm7 reported.
EGX50 increased by 0.03 percent, EGX70 rose by 0.15 as well as EGX100 increased by 0.07 percent.
On the other hand, EGX50 declined by 0.03 percent and EGX20 down by 0.14 percent.
Egypt to import 50K tons of sugar to reduce prices
Egypt will import 50,000 tons of sugar aiming to reduce prices, head of grocery department at Giza Chamber of Commerce Yehya Kasseb told Youm7.
He added that the latest price of one ton of sugar reached 6,800 EGP, while the consumer will pay 7.25 EGP for it.
Increased electricity prices raise steel production cost
The production price of one ton of steel has increased to between 50-60 EGP as a result of a hike in electricity bill according to the new power prices announced by government, Youm7 reported.
Egypt’s budget deficit rises to 11.2 percent of GDP in first 11 months of 2015/16
Egypt’s budget deficit widened to 11.2 percent of gross domestic product in the first 11 months of the financial year, up from 10.8 percent a year earlier, the Finance Ministry said on Monday.
In its monthly report, the ministry said the budget deficit stood at 311 billion Egyptian pounds ($35.02 billion) between July 2015 and May 2016, compared to 261.9 billion pounds in the same period a year ago.
Egypt’s financial year runs from July 1 to June 30.
Egypt has been struggling to stem an economic crisis caused in part by an acute foreign currency shortage and surging inflation.
The foreign currency shortage has battered Egypt, which depends on imports for everything from food to fuel. In March, the central bank devalued the pound to 8.78 per dollar.
Real GDP growth for the first nine months reached 4.3 percent versus 4.8 percent in the same period a year earlier, the Planning Ministry said in a separate document earlier on Monday.
Health ministry decision makes zero ergot Egypt’s new normal
Egypt’s health ministry banned wheat with any ergot fungus on Monday, a decision traders said signals the zero tolerance policy that wreaked havoc on the country’s grain purchases earlier this year is back to stay.
The decree, seen by Reuters, brings the ministry in line with an agriculture ministry decree issued last week reinstating the ergot ban, a policy that previously hampered the world’s largest wheat buyer’s ability to import grain.
The health ministry’s decision is the latest in a back and forth battle over the highly contentious wheat import regulation that has halted state grain tenders, raised prices, and been the subject of debate between and within ministries that have often advocated policies at odds with one another.
Ergot, a common grains fungus that can cause hallucinations in large amounts, is considered harmless in low quantities and more common international standards allow a 0.05 percent tolerance level.
Traders, who say it is nearly impossible to guarantee zero ergot, said Monday’s decree was significant as it brings all three ministries that oversee the policy – supply, health and agriculture – in line for the first time and leaves little room for the state grain buyer to relax the rules if need be.
“It’s almost impossible now to change the decree, it’s like they want to force the zero ergot and think that everyone should abide by it,” one Cairo-based trader said.
When Egypt’s agriculture quarantine authority began rejecting shipments containing trace levels of ergot last year, it was the lone advocate of a stringent zero tolerance policy, on the margins of a debate over quality control.
At the time, the quarantine authority’s own ministry, the agriculture ministry, publicly claimed to follow the tolerance level of up to 0.05 percent.
In recent weeks, however, and following an agriculture ministry-led study that concluded ergot could pose a threat to plant life, the quarantine’s strict position has been formally adopted by every major institution overseeing the ergot rules.
The impact on imports is already being seen. Last week, at the first tender state grain buyer GASC (General Authority for Supply Commodities) has held with zero ergot stipulated in its tender booklet, only one supplier made an offer.
GASC was forced to cancel the tender, underscoring the difficulty the country may face sustaining a massive bread subsidy programme while also demanding standards suppliers say are unattainable.
Traders said the health ministry decree will now make it harder for GASC, a long time proponent of the more tolerant 0.05 standard, to ease the rules should it continue to face low turnout at tenders.
“GASC used to base their 0.05 percent policy on the basis of the health ministry’s position, so now that they’ve changed that it means the decision is likely final,” another Cairo trader said.
Egypt’s agricultural quarantine authority has argued that even trace amounts of ergot can contaminate plant life and give the fungus a foothold to flourish where it does not exist now.
The unified stance on ergot also comes amid what traders have said are heightened inspection measures at ports of origin in recent weeks, implemented to guarantee zero ergot.
Traders say the measures, which include re-inspecting and replacing wheat suspected of containing even single grains infected with ergot, have held up shipments at ports and added to the cost of doing business with Egypt.
“Everything is a mess in Egypt and in the ports of Constanta and Novorossiysk,” said one trader, referring to wheat shipments that have been held up in Romania and Russia.
For a timeline detailing Egypt’s on again off again relationship with ergot click here.