Egypt is currently the worlds largest importer of wheat
Egypts Minister of Supply & Internal Trade says Cairo is planning to establish a commodities exchange by the end of this year.
In a press release circulated to the local press, Khalid Hanafy said the new exchange aims to attract 2 million investors in its first year, rising to 9 million over the next five years. The ministry also anticipates attracting 130 brokerage centres, involving some 65,000 brokers.
Local analysts say that establishing an exchange in Egypt will protect local farmers from global price swings and encourage grain production by increasing access to international markets.
It is understood the exchange will handle six agricultural commodities in addition to oil and gold.
Egypt is currently the worlds largest importer of wheat and is expected to purchase 11.5 million tonnes during the 2015-16 trading year, according to the US Department of Agriculture.
The announcement follows a plan put in place in 2014 to transform Egypt into a global grain trading hub. Analysts have told MEED that a commodities exchange is also part of the governments efforts to boost the development of the Suez Canal Economic Zone (SCZone), which aims to be a major industrial and logistics hub.
Egypt looks to press ahead with wheat reforms
Grain purchasing reforms are needed for the worlds biggest wheat importer, but Cairo will be wary of the implications
Egypts growing population and dependence on key food imports means food security is a vital issue facing the government.
The country is the largest wheat importer in the world, with the state buyer, General Authority for Supply Commodities (GASC), often opting for wheat from Russia and Ukraine. Russian wheat imports make up 40 per cent of total demand from Egypt, according to GASC. Read more.
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