Excerpts from Ashraf El Attal’s Interview

Ashraf El Attal discusses how Egypt can become self-sufficient in Wheat Production

Ashraf El Attal is the former president of the Grain and Feed Trade Association (GAFTA). He is an influential business leader who has served on a number of positions in his 33 yearlong business career. Attal has a very strong track record of success in a number of professional fields.

Currently, he is the CEO of Fortuna DMCC, a Dubai based trading house which supplies commodities such as food grains, feeds and by-Products. It also supplies major UN agencies and NGO’s with commodities as well as food and hygiene parcels.

We talked with this popular Egyptian Wheat Trader at length how his nation can become self-sufficient in wheat production. Here are some excerpts from our Interview with Ashraf El Attal.

1. Did Russia really exported substandard wheat to Egypt in 2009 and 2017 or there is more to it than meets the eye?

Ashraf El Attal: Russia has a very good quality wheat and always up to the international standards. This year, Russia became the largest wheat exporter in the world with an estimated export volume of 36 MMT

 

2. How do you view wheat trade problem in Egypt?

Ashraf El Attal: Egypt is the world’s largest buyer of wheat as well as the largest buyer of Russian Wheat. Both countries rely on each other and this cooperation will continue provided that Russia is producing enough wheat.

 

3. What can be the ultimate solution to end the Wheat problem in Egypt once forever?

Ashraf El Attal: Egypt should work on 2 strategies:

1) Remove the bread subsidy and replace it by cash subsidy. This by default will decrease the consumption per capital from 178 kg to max 100 kg.

2) This will reduce the total wheat importation to 4-5 MMt instead of the current 12 MMt.

3) Encourage Egyptian farmers to grow more wheat, to reduce the dependency on imports. Also the need to improve the yield

 

4. Is smartcard system a success or failure? Was there really a need to introduce smart card system in the country?

Ashraf El Attal: Cash subsidy is the best form of subsidy as it gives the money to the qualified people. It also creates a better consumption pattern and reduces the waste

 

5. What if Russia blocks wheat to Egypt?
Ashraf El Attal: I don’t see a reason Russia would attempt to such act since Egypt is its largest customer. Nevertheless, there are other alternatives in the black sea or the Americas

 

6. Are Egypt’s domestic wheat reserves sufficient enough to meet the food needs of its citizens?

Ashraf El Attal: Egypt normally keeps 3-4 months supplies in stock. Next month the local harvest will start which will increase the local stocks by default

 

7. According to experts, Egypt’s ambition to transform the nation into global commodities hub has not so far yielded any convincing results to attract global companies. Is it true?

Ashraf El Attal: This idea was put on the table a few years back. In my opinion, the double handling cost won’t make sense.

How will Major Exporter of Rice Egypt Become a Rice Importer In 2019?

Wheat field - egyption trader

Recent developments in Egypt is likely to turn the country into a rice importer after decades of being a major exporter of the crop.

Egyptian traders say that the intense ban and crack down over rice cultivation is affecting the livelihood of farmers in the country who have depended on the river Nile for millions of years to irrigate their strategic crops mainly wheat and rice.

According to Egyptian authorities, the restrictions are aimed at conserving water but farmers in the country allege that the forcible changes in farming laws is affecting them very badly,” As per the media reports, some farmers are defying the imposed restrictions on rice cultivation.

“Some farmers in the region continue to grow a medium- grain variety of the crop because it is their livelihood,” said an Egyptian trader on the basis of anonymity.

A group of farmer told Reuters news agency recently that police is raiding their homes and putting them behind bars until they pay the fine for defying the restrictions.

On the other hand, Egypt’s Neighbor Ethiopia is preparing to fill its Grand Renaissance Dam reservoir. According to MR. Ashraf El Attal, the CEO of Fortuna DMCC, a commodities trading house based in Dubai, it can have deadly consequences for the farmers in Egypt who depend on Nile water to irrigate strategic crops to feed 96 million population of the country. The population of Egypt nation is set to grow to 128 million by 2030.

Many Egyptian traders say that the responsibility to safeguard Egypt’s share of the Nile, on which country relies for drinking water as well as farming has come on the shoulders of President Abdel Fattah.

“But he seems to do nothing except imposing restrictions on its own farmers to grow water-intensive rice crop showing a sense of urgency, “says an Egyptian trader.

Rice is a very valuable commodity in Egypt after Wheat. Egyptian Government has reportedly decreed that farmers in the country can plant 724,000 feddans of rice which is less than the half of what they were allowed to plant in 2017.

Majority of the Egyptian rice and wheat traders including former GAFTA president Ashraf El Attal believe if the authorities in the country stick to this current approach, the country will be forced to import at least 1 million tonnes of rice from next year.

Egypt Wheat Import Problems and Solutions

Inconsistent import rules

Due to inconsistent import rules and inspection procedures, the wheat trade in Egypt comes to halt time after time. In 2009, Egyptian Government ordered re-export of Russian wheat supplements brought to the country claiming its quality was very low and not fit for consumption. This was not the first time when wheat trade in the nation had come to halt because of one or the other issue.

Inspection Procedures

In 2016, Egyptian Government once again ordered re-export of foreign wheat shipments and arrest orders of an Egyptian trader citing the reason that there were traces of ergot fungus present in it.

Egyptian Government decided to reinstate its previous policy on wheat imports and decided it would accept only up to 0.05 per cent of the ergot in wheat shipments, in accordance with international standards.

But it had to back down from its earlier claim immediately as it angered its wheat exporting partners. Russia, the largest wheat exporter to Egypt had announced to stop exporting wheat to Egypt.

“The halt in the wheat trade between the two nations would have caused serious social, political and economic crisis in Egypt,” said an Egyptian Trader.

Too much dependency on subsidized wheat

Though authorities in Egypt recently issued guidelines to streamline the wheat trade in the country, the chances of the nation becoming self-sufficient in Wheat ever again in the future still seems bleak. The only solution to tackle this problem seems increasing wheat imports from the global markets.

To decrease its dependency on wheat imports, Egypt is looking to cultivate 3.25 million acres of wheat in the country. This was Agriculture ministry spokesman in 2017 via a statement given to the press.

The food needs of Egypt is above 20 million tonnes but local generation is still inadequate by a wide margin to meet the food needs of the people in the country.

“Government is expecting farmers in Egypt to produce a bumper harvest of wheat. Due to the economic crisis in the nation, it is not possible. Even if agriculture production is increased, due to poor storage and transportation facility, half of the wheat we cultivate is not reaching the market, ‘said Ashraf El Attal, accomplished Egyptian Trader and former President of GAFTA.

Social, Economic And Social Crisis

The farmers in Egypt say that they have never faced such a hard time in the country. They are blaming authorities for social injustice.

“There is no water, we are irrigating our land with sewage. We are facing huge social injustice, the facilities are being provided to rich, the poor farmers are being pushed to black market to purchase seeds, fertilizers and other essentialities for wheat forming,” said a group of Egyptian traders.

Corruption

The hardest plague to eradicate in the country, though, has been the much deep-rooted corruption. To end the corruption, in 2015, the smart card system was introduced in the country.

Authorities claim that the introduction of smart card system in the country has been a big success saving millions of dollars, reducing dependence on imports and ending wheat shortages, but Egyptian traders believe the reforms taken have failed terribly.

“The system card system has been compromised,” the Supplies Minister Hanafi recently acknowledged it in an interview given to international news agency Reuters