Egypt sets new rules for rice exports

Egypt's Trade Ministry said on Tuesday it will hold monthly tenders to
grant rice export licences to traders and will reconsider the value of
its rice export tariff.

"The minister will set the rules to regulate the new system that will
include how to apply for these tenders and which authority will
supervise them," a ministry statement said.

The statement did not give further details about the new value of the
rice export tariff. Egypt had doubled the figure to 2,000 Egyptian
pounds a tonne in July.

The ministry also said it will announce a tender next week to export
100,000 tonnes of rice for shipment during December.

The new rules will also include a limit on the quantity of rice each
exporter will be able to sell in the tender to guarantee that the
maximum number of traders benefit, the statement said.

Egypt imposed an export ban in March last year to control the rising
cost of basic commodities. The ministry has said the ban will remain in
effect until October 2010.

However, a system created in February allowed exporters to sell their
rice abroad if they delivered the same amount of rice to the state grain
buyer in tenders.

This created a market for rice export licences, as some traders who did
not export sold the licences they obtained in tenders to exporters.

Local prices tumbled as a result, as traders bid low in state tenders so
they could secure licences to sell on.

The new system announced on Tuesday de-links state rice tenders from the
export system as exporters are no longer required to sell their rice to
the state to gain a license.

The framework, "insures that the Egyptian citizen can get his rice needs
at low prices....and at the same time maintains the capacity of rice
mills and encourages them to continue their activities," Minister Rachid
Mohamed Rachid said in the statement.

Egyptian rice millers have complained that the fall in local rice prices
caused by the export ban and the system of linking exports to state
purchases left them with heavy losses.

Egypt's export ban is part of a wider policy to discourage its farmers
from growing rice in order to save water.

A member of the agricultural export council has said there were plans to
cut the area planted with rice by about a third to 1.1 million feddans
(462,000 hectares) in the 2010/2011 season.

Egypt has a water supply of about 860 cubic metres per person per year,
well below the water poverty line of 1,000 cubic metres per person a
year, with agriculture consuming more than 80 percent of total water supply.