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|15 October, 2018

Egypt studying wheat hedging, still buying spot

Egypt is studying the possibility of hedging against the rise in global prices of the grain

Image used for illustrative purpose. An Egyptian farmer Hussien Yaser, 54, and his wife use a threshing machine as they harvest their wheat crop in Qaha, El-Kalubia governorate, northeast of Cairo, Egypt May 5, 2016.

Image used for illustrative purpose. An Egyptian farmer Hussien Yaser, 54, and his wife use a threshing machine as they harvest their wheat crop in Qaha, El-Kalubia governorate, northeast of Cairo, Egypt May 5, 2016.

REUTERS/Amr Abdallah Dalsh

CAIRO  - Egypt, the world's largest wheat importer, is studying the possibility of hedging against the rise in global prices of the grain, Supply Minister Ali Moselhy said on Monday.

"Until now we are buying spot ... there is a working group formed within the finance ministry to study this (hedging) ... but to this moment no decision has been taken," Moselhy told a news conference in Cairo.

A government source earlier told Reuters Egypt was in the "early stages" of talks with banks over the scheme. 

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Moselhy also said Egypt would need around 400,000 to 500,000 tonnes of rice imports but that the ministry was still evaluating its needs and would not import from only one origin.

"We are going to pick the right time to start building reserves ... we are still studying," he said.

Local press reports in September had stated Egypt would import its rice from Vietnam.

"It will not be from one origin only," Moselhy said, adding China and India were countries of interest for rice imports.

Egypt has over four months of strategic wheat stocks, 5.6 months of sugar and 3.2 months of vegetable oils, Moselhy said. 

Cairo spends around $1.5 billion annually on wheat imports for a sprawling bread subsidy programme relied on by tens of millions of Egyptians.

(Reporting by Nadine Awadalla; Writing by Maha El Dahan; Editing by Mark Potter) ((Maha.Dahan@thomsonreuters.com; + 9712 4082101; Reuters Messaging: maha.dahan.thomsonreuters.com@reuters.net))