Egypt Bans Rice Exports as of September 1

Aug 28, 2015
Like their rice, staying put
IP-Egypt Bans Rice Exports as of September 1-150828 

CAIRO, EGYPT -- Egypt will ban rice exports again as of September 1 to satisfy domestic consumption, the ministry of trade and industry said yesterday.   The ministry has yet to decide the duration of the ban, according to Sayed Abu Qomsan, a deputy to the minister.

Egypt is expected to produce 2.7 million metric tons (MT) of milled rice in the 2015-2016 season while its annual consumption is estimated at 3.6 million MT.  The 750,000 MT gap will be filled from existing stocks, the ministry said in a statement.

Egypt had allowed the export of its medium grain rice last October with an export tax of $280 per MT, on condition that traders sell the government one MT of rice at 2,000 Egyptian pounds ($255.43) for every MT of rice exported.  Thursday's statement said any export licenses granted according to the 2014 allowance could still be used.

Egyptian medium grain rice mainly competes with U.S. and Australian rice in Jordan, as well as Russian, Italian, and Indian medium grain rice on the Turkish market.  However, traders had argued the export tax and regulations imposed made exports non-profitable.

Indeed, official rice import statistics for Turkey do not indicate any Egyptian rice imports for 2014, nor for the period of January-June 2015.  There are no official figures available on Jordanian rice imports for 2015.  However, black market trade has happened in the past and is expected to continue in spite of the newly imposed ban.

Egypt first imposed a ban on exports in 2008 saying it needed to save the rice for local consumption and wanted to discourage rice farmers from growing the crop to save water. The government has used the tactic at other times as well, including a 2013 ban that helped the government build up stocks.