Egypt to buy Kazakh wheat, grow grain in Uganda

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Reuters | Sat 30 Aug 2008

CAIRO (Reuters) - Egypt has agreed to buy a million tonnes of wheat from Kazakhstan to meet local market needs, and Uganda has allocated farmland for the Arab country to grow wheat and corn, Egyptian state-owned media said on Saturday.

Egypt's al-Ahram newspaper said Trade Minister Rachid Mohamed Rachid had agreed in principle to the Kazakh deal in talks with President Nursultan Nazarbayev on Friday in Astana.

Egypt is one of the world's largest wheat importers. It bought at least 6.5 million tonnes of overseas-origin wheat in the 2007/2008 fiscal year, much of that from Russia, the United States and Kazakhstan.

Much of the wheat Egypt buys goes into its subsidised bread regime, a main component of its economic policy that allows millions to survive on low salaries and prevents discontent.

The Egyptian newspaper did not say how much Egypt would pay for the Kazakh wheat, nor when the purchases would be made or whether the wheat would be bought through the government's main wheat-buying agency, GASC.

It added that Rachid and Nazarbayev had also discussed building silos to store Kazakh wheat on Egypt's Mediterranean coast to help Kazakhstan overcome problems it has transporting wheat to the Middle East.

The paper mentioned the northern ports of Damietta, Dekheila and Alexandria as possible sites for silos.

Egypt has bought over 1.48 million tonnes of wheat so far in the fiscal year beginning on July 1, none of it from Kazakhstan. A Kazakh wheat export ban in place since April is due to be lifted on September 1.

Separately, Egyptian media said that Uganda had allocated about 2 million acres (800,000 hectares) of land to Egypt to cultivate wheat and corn.

"Uganda allocated to us 2 million feddans (acres) of land in a number of places," Agriculture Minister Amin Abaza told al-Ahram, without specifying the value of the deal.

"The Egyptian side, represented by Egyptian private agricultural companies, will conduct tests on it shortly to determine the most appropriate strains for it," he added.

Abaza said Egypt was also looking into the best way to finance the project and for transport options, and that seven agriculture firms were prepared to start work immediately.

He added that a delegation of government officials and businessmen would travel to Uganda in October to negotiate final details and prepare to start work on the first 200,000 acres.

Egypt had proposed in April to grow wheat in Sudan to meet the needs of Egyptian consumers, and then in May identified an area of about 2 million acres on the Sudan border where the two countries could grow wheat in a joint project.

Egyptian media have reported that Saudi Arabia and some other Gulf Arab countries had made a similar proposal.

Original source: Reuters
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