Required Report - Public distribution

**Date:** 2/14/2008

**GAIN Report Number:** EG8003

EG8003

**Egypt**

**Grain and Feed**

**Annual**

**2008**

**Approved by:**

![](media/image1.wmf)Peter Kurz

U.S. Embassy

**Prepared by:**

Chris Rittgers & Sherif Ibrahim

**Report Highlights:**

Wheat imports are forecast to remain around 7.5 million tons through
2008/09, while corn imports are expected to remain at just over 4
million tons. U.S market share in wheat imports is forecast to rebound
to about 40 % in 2007/08. U.S. corn imports will continue to dominate
the market. Rice exports are expected to decline during 2007/08, due to
local exporters' self-imposed suspension of exports.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Cairo \[EG1\]

\[EG\]

Table of Contents

[PSD Wheat 3](#psd-wheat)

[Production 3](#production)

[Trade 4](#trade)

[Trade Matrix 5](#trade-matrix)

[Stocks 5](#stocks)

[Factors Affecting U.S. Trade Error! Bookmark not
defined.](#__RefHeading___Toc190733297)

[PS&D Corn 6](#psd-corn)

[Production 6](#production-1)

[Consumption and Utilization 6](#consumption-and-utilization)

[Trade 7](#trade-1)

[Trade Matrix 8](#trade-matrix-1)

[PS & D Rice 9](#ps-d-rice)

[Production 9](#production-2)

[Trade 10](#trade-2)

[Trade Matrix 10](#trade-matrix-2)

[Consumption and Stocks 10](#consumption-and-stocks)

# PSD Wheat

<table style="width:100%;">
<colgroup>
<col style="width: 12%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 10%" />
<col style="width: 7%" />
<col style="width: 8%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><p><strong>PSD Table</strong></p>
<p><strong>Wheat</strong></p>
<p>(1000 HA)(1000 MT)(MT/HA)</p></td>
</tr>
<tr class="even">
<td></td>
<td>2006</td>
<td>Revised</td>
<td></td>
<td>2007</td>
<td colspan="2">Estimate</td>
<td>2008</td>
<td>Forecast</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>07/2006</td>
<td>07/2006</td>
<td></td>
<td>07/2007</td>
<td>07/2007</td>
<td></td>
<td>07/2008</td>
<td>07/2008</td>
</tr>
<tr class="odd">
<td>Area Harvested</td>
<td>1286</td>
<td>1286</td>
<td>1286</td>
<td>1290</td>
<td>1290</td>
<td>1287</td>
<td>0</td>
<td>0</td>
<td>1288</td>
</tr>
<tr class="even">
<td>Beginning Stocks</td>
<td>4006</td>
<td>4006</td>
<td>4006</td>
<td>4120</td>
<td>4000</td>
<td>4120</td>
<td>3330</td>
<td>3880</td>
<td>4128</td>
</tr>
<tr class="odd">
<td>Production</td>
<td>8274</td>
<td>8274</td>
<td>8274</td>
<td>8320</td>
<td>8320</td>
<td>8275</td>
<td>0</td>
<td>0</td>
<td>8277</td>
</tr>
<tr class="even">
<td>MY Imports</td>
<td>7300</td>
<td>7300</td>
<td>7473</td>
<td>7000</td>
<td>7350</td>
<td>7528</td>
<td>0</td>
<td>0</td>
<td>7540</td>
</tr>
<tr class="odd">
<td>TY Imports</td>
<td>7300</td>
<td>7300</td>
<td>7473</td>
<td>7000</td>
<td>7350</td>
<td>7528</td>
<td>0</td>
<td>0</td>
<td>7540</td>
</tr>
<tr class="even">
<td>TY Imp. from U.S.</td>
<td>2280</td>
<td>1900</td>
<td>2280</td>
<td>0</td>
<td>2000</td>
<td>2404</td>
<td>0</td>
<td>0</td>
<td>2350</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>19580</td>
<td>19580</td>
<td>19753</td>
<td>19440</td>
<td>19670</td>
<td>19923</td>
<td>3330</td>
<td>3880</td>
<td>19945</td>
</tr>
<tr class="even">
<td>MY Exports</td>
<td>10</td>
<td>0</td>
<td>10</td>
<td>10</td>
<td>0</td>
<td>15</td>
<td>0</td>
<td>0</td>
<td>15</td>
</tr>
<tr class="odd">
<td>TY Exports</td>
<td>10</td>
<td>0</td>
<td>10</td>
<td>10</td>
<td>0</td>
<td>15</td>
<td>0</td>
<td>0</td>
<td>15</td>
</tr>
<tr class="even">
<td>Feed Consumption</td>
<td>50</td>
<td>75</td>
<td>50</td>
<td>50</td>
<td>80</td>
<td>60</td>
<td>0</td>
<td>0</td>
<td>60</td>
</tr>
<tr class="odd">
<td>FSI Consumption</td>
<td>15400</td>
<td>15505</td>
<td>15573</td>
<td>16050</td>
<td>15710</td>
<td>15720</td>
<td>0</td>
<td>0</td>
<td>15870</td>
</tr>
<tr class="even">
<td>Total Consumption</td>
<td>15450</td>
<td>15580</td>
<td>15623</td>
<td>16100</td>
<td>15790</td>
<td>15780</td>
<td>0</td>
<td>0</td>
<td>15930</td>
</tr>
<tr class="odd">
<td>Ending Stocks</td>
<td>4120</td>
<td>4000</td>
<td>4120</td>
<td>3330</td>
<td>3880</td>
<td>4128</td>
<td>0</td>
<td>0</td>
<td>4000</td>
</tr>
<tr class="even">
<td>Total Distribution</td>
<td>19580</td>
<td>19580</td>
<td>19753</td>
<td>19440</td>
<td>19670</td>
<td>19923</td>
<td>0</td>
<td>0</td>
<td>19945</td>
</tr>
<tr class="odd">
<td>Yield</td>
<td>6.433904</td>
<td>6.433904</td>
<td>6.433904</td>
<td>6.449612</td>
<td>6.449612</td>
<td>6.429681</td>
<td>0</td>
<td>0</td>
<td>6.426242</td>
</tr>
</tbody>
</table>

# Production

Wheat area and production remain relatively stable, and output is
projected at just under 8.3 million tons in 2008/09. For the 2008/09
crop, the government has recently announced the procurement price at LE
2,533 per ton (\$460 per ton), hoping to purchase 3 million tons this
marketing year. As a comparison, the current landed price for Russian
wheat is about \$432/ton, compared to \$218/ton during February 2007.

The total quantity of locally produced wheat sold to the Ministry of
Industry and Foreign Trade in 2007/08 is estimated to be 1.7 million
tons, compared to 2.7 million tons in 2006/07. This drop in GASC
purchasing quantity is due to the higher price offered to farmers by the
private sector. The private sector offered LE 1,900 and LE 2,000 per ton
while the government procurement price was LE 1,250 per ton. Most
observers are skeptical that GASC will achieve its target due to
expected higher prices will be offered by the private sector.

**Consumption**

Per capita consumption of wheat in 2007/2008 is expected to reach 198
Kg. To keep pace with population growth, a slight increase in total
consumption is forecast for 2008/09.

## Trade

## 

Since the beginning of 2007/08 (July 2007) through the end of February
2008, Ministry of Supply (GASC) purchased 5.3 million tons of imported
wheat to produce 82 percent extraction flour used for the subsidized
baladi bread. This represents about 2 million tons over the quantity
imported during the same period last year. The increase in imports by
GASC is mainly due to less quantity purchased from local producers
coupled with the increased demand for subsidized bread. The budget for
the subsidy on baladi bread has had to be increased dramatically due to
increased world wheat prices. The budget for the subsidy on baladi bread
in 2007/08 is estimated at LE 8 billion (\$1.5 billion) as compared to
LE 3.8 billion last year. During the same period, private sector
companies purchased 2 million tons of imported wheat to produce 72
percent extraction flour used in the production of high quality flat
bread and European type bread, pastries and pasta.

Russia continues to be the largest wheat supplier to the Egyptian
market. From the beginning of 2007/08 through the end of February 2008,
Russian exports accounted for 49 percent (2,650,000 tons) of Egyptian
wheat imports. Although U.S. market share has increased in 2007

/08 relative to the previous year, U.S. market share continues to lag
below levels of a few years ago. From the beginning of 2007/08 through
the end of January 2008, U.S. exports accounted for 46 percent
(2,475,000 tons) of wheat imports; and the remainder was imported from
Kazakhstan and Canada. U.S. wheat sales may decline through the end of
2007/08. This expected decrease is mainly due to GASC's preference to
purchase locally from the private sector importers who in turn favor
Black Sea origins. In addition, the Egyptian government is currently
negotiating a barter deal with Syria to import 300,000 tons of Syrian
wheat against 150,000 tons of Egyptian rice to Syria. Most private
sector wheat traders import small vessels from the Black Sea area. In
its last tender, dated Feb 2, 2008, the Ministry of Supply purchased
115,000 tons of wheat from Russia at a reported price of LE 2,355 per
ton (\$425/ ton), and 30,000 tons of SRWW at a reported price of LE
2,398/ton (\$432/ton).

For MY 2008/2009, Egyptian wheat imports are expected to reach 7.540,000
tons, with GASC projected to import nearly 5.9 million tons, and the
rest to be imported by the private sector. This increase in GASC imports
is expected because of the increased amount of wheat imported for the
production of 82 percent flour. Imports of wheat flour are insignificant
and are now limited to international donations such as the 20,000 tons
donated by France during this marketing year.

# 

# Trade Matrix

+-------------------+--------------+-------------------+--------------+
| **Import Trade    |              |                   |              |
| Matrix**          |              |                   |              |
|                   |              |                   |              |
| Egypt             |              |                   |              |
|                   |              |                   |              |
| Wheat             |              |                   |              |
+-------------------+--------------+-------------------+--------------+
| Time Period       | MY 2005/06   | Units:            | My 2006/07   |
+-------------------+--------------+-------------------+--------------+
| Imports for:      |              |                   | **1**        |
+-------------------+--------------+-------------------+--------------+
| U.S.              | 1,247        | U.S.              | 2,405        |
+-------------------+--------------+-------------------+--------------+
| Others            |              | Others            |              |
+-------------------+--------------+-------------------+--------------+
| Russia            | 2,719        | Russia            | 2,796        |
+-------------------+--------------+-------------------+--------------+
| Australia         | 1,143        | Canada            | 602          |
+-------------------+--------------+-------------------+--------------+
| France            | 1,292        | France            | 423          |
+-------------------+--------------+-------------------+--------------+
| Syria             | 227          | Kazakhstan        | 420          |
+-------------------+--------------+-------------------+--------------+
|                   |              | Ukraine           | 319          |
+-------------------+--------------+-------------------+--------------+
|                   |              | Australia         | 188          |
+-------------------+--------------+-------------------+--------------+
|                   |              | Syria             | 178          |
+-------------------+--------------+-------------------+--------------+
|                   |              | Romania           | 96           |
+-------------------+--------------+-------------------+--------------+
|                   |              | Bulgaria          | 46           |
+-------------------+--------------+-------------------+--------------+
|                   |              |                   |              |
+-------------------+--------------+-------------------+--------------+
| Total for Others  | 5381         |                   | 5068         |
+-------------------+--------------+-------------------+--------------+
| Others not Listed | 571          |                   |              |
+-------------------+--------------+-------------------+--------------+
| Grand Total       | 7199         |                   | 7473         |
+-------------------+--------------+-------------------+--------------+

## Stocks

The Ministry of Supply and Domestic Trade tries to maintain five months
supply of strategic stocks. However, due to limited storage capacity
that constrains the government from reaching this target, the strategic
stocks are now redefined to include wheat import purchases in the
pipeline, usually in the range of three months of annual consumption.
Currently, total covered storage capacity for wheat is estimated at one
million metric tons, including about 350,000 tons in silos at three
different ports, 250,000 tons in inland silos and 400,000 tons in open
storage, mostly in metropolitan areas. In addition to government storage
facilities, several private sector traders and mills currently have
their own receiving and storage facilities, estimated at 500,000 tons.

## PS&D Corn

<table style="width:100%;">
<colgroup>
<col style="width: 13%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 7%" />
<col style="width: 9%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><p><strong>PSD Table</strong></p>
<p><strong>Corn</strong></p>
<p>(1000 HA)(1000 MT)(MT/HA)</p></td>
</tr>
<tr class="even">
<td></td>
<td>2006</td>
<td>Revised</td>
<td></td>
<td>2007</td>
<td colspan="2">Estimate</td>
<td>2008</td>
<td>Forecast</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>10/2006</td>
<td>10/2006</td>
<td></td>
<td>10/2007</td>
<td>10/2007</td>
<td></td>
<td>10/2008</td>
<td>10/2008</td>
</tr>
<tr class="odd">
<td>Area Harvested</td>
<td>725</td>
<td>725</td>
<td>717</td>
<td>730</td>
<td>730</td>
<td>720</td>
<td>0</td>
<td>0</td>
<td>725</td>
</tr>
<tr class="even">
<td>Beginning Stocks</td>
<td>645</td>
<td>478</td>
<td>645</td>
<td>885</td>
<td>270</td>
<td>670</td>
<td>665</td>
<td>205</td>
<td>665</td>
</tr>
<tr class="odd">
<td>Production</td>
<td>5940</td>
<td>5940</td>
<td>6149</td>
<td>5980</td>
<td>5980</td>
<td>6174</td>
<td>0</td>
<td>0</td>
<td>6175</td>
</tr>
<tr class="even">
<td>MY Imports</td>
<td>4800</td>
<td>4250</td>
<td>4256</td>
<td>4500</td>
<td>4270</td>
<td>4220</td>
<td>0</td>
<td>0</td>
<td>4100</td>
</tr>
<tr class="odd">
<td>TY Imports</td>
<td>4800</td>
<td>4250</td>
<td>4256</td>
<td>4500</td>
<td>4270</td>
<td>4220</td>
<td>0</td>
<td>0</td>
<td>4100</td>
</tr>
<tr class="even">
<td>TY Imp. from U.S.</td>
<td>3517</td>
<td>3800</td>
<td>3198</td>
<td>0</td>
<td>3700</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>11385</td>
<td>10668</td>
<td>11050</td>
<td>11365</td>
<td>10520</td>
<td>11064</td>
<td>665</td>
<td>205</td>
<td>10940</td>
</tr>
<tr class="even">
<td>MY Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>TY Exports</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Feed Consumption</td>
<td>8500</td>
<td>8398</td>
<td>8380</td>
<td>8600</td>
<td>8265</td>
<td>8299</td>
<td>0</td>
<td>0</td>
<td>8090</td>
</tr>
<tr class="odd">
<td>FSI Consumption</td>
<td>2000</td>
<td>2000</td>
<td>2000</td>
<td>2100</td>
<td>2050</td>
<td>2100</td>
<td>0</td>
<td>0</td>
<td>2300</td>
</tr>
<tr class="even">
<td>Total Consumption</td>
<td>10500</td>
<td>10398</td>
<td>10380</td>
<td>10700</td>
<td>10315</td>
<td>10399</td>
<td>0</td>
<td>0</td>
<td>10390</td>
</tr>
<tr class="odd">
<td>Ending Stocks</td>
<td>885</td>
<td>270</td>
<td>670</td>
<td>665</td>
<td>205</td>
<td>665</td>
<td>0</td>
<td>0</td>
<td>550</td>
</tr>
<tr class="even">
<td>Total Distribution</td>
<td>11385</td>
<td>10668</td>
<td>11050</td>
<td>11365</td>
<td>10520</td>
<td>11064</td>
<td>0</td>
<td>0</td>
<td>10940</td>
</tr>
<tr class="odd">
<td>Yield</td>
<td>8.193103</td>
<td>8.193103</td>
<td>8.576011</td>
<td>8.191781</td>
<td>8.191781</td>
<td>8.575</td>
<td>0</td>
<td>0</td>
<td>8.517241</td>
</tr>
</tbody>
</table>

# Production

The total corn area for the MY 2007/2008 is estimated at 720,000 HA,
slightly increased from 2006/2007 level. The small increase in corn
acreage is attributed to increasing demand for corn silage for livestock
feed production. A further increase in corn acreage is expected in
2008/2009. This expected growth is mostly attributed to the increased
price for imported yellow corn. The same factor is expected to lead
farmers to switch from rice to corn. In 2007/2008, total corn production
is estimated at about 6.1 million tons. For 2008/2009, total corn
production is expected to increase and reach 6.2 million tons.

## Consumption and Utilization

While total corn consumption did not change significantly during the
last two years, corn consumption for feed has continued to decrease. In
2007/08 corn feed consumption is estimated at about 8,299,000 tons,
compared to 8,380,000 tons in the previous year. The majority of the
local corn crop is utilized for animal feed (mostly consumed on farms)
and about 1.5 million tons is used for food purposes (either milled or
consumed fresh). Large commercial end-users and feed mills rely on
imported yellow corn to meet their requirements.

Corn use in feed is forecast to remain depressed in 2008/09 as the
poultry industry is still reeling from Avian Influenza (AI), which began
in February 2006. Continued outbreaks in 2008 in backyard flocks and
several commercial farms cloud prospects for the industry, and temper
expectations for further increases in demand for corn. In addition, as a
result of increased international prices for corn, soybean meal and
other feed ingredients, coupled with constant out put (milk and beef)
prices, some dairy farms and feedlots have gone out of business. In
2007/08, about 500,000 tons of locally produced white corn is expected
to be delivered to the Ministry of Social Welfare for the production of
subsidized baladi bread. In 2008/09, the total white corn delivery is
expected to reach 600,000 tons. In addition, there is a small, but
growing demand for food products containing corn (snack food). This, in
addition to the increase in demand for corn oil, has helped to partially
offset the decrease in demand for corn in the feed industry.

As a direct result of AI, and the loss of some dairy and beef farms, use
of imported corn by the poultry and livestock sectors is forecast to
drop to about 8.09 million tons in 2008/09. However, this drop will be
offset by growth in use of imported corn in the processing sector.

# Trade

Total corn imports for 2007/08 are expected to decrease due to the
problems mentioned earlier in both poultry and livestock sectors. Total
corn imports since the beginning of 2007/08 (October 2007) until the end
of December 2007 are estimated at 782,921 tons compared to 918,157 tons
during the same period of the previous year. U.S. market share accounted
for 75 percent compared to 96 percent in 2005/06 and will continue to
dominate the market. Argentina's market share increased against U.S.
share in MY 2006/07, supplying 16 percent in 2006/2007 versus 3 percent
in MY 2005/06. However U.S market share is expected to rebound 2007/08,
and accounted for 86 percent as of the end of December 2007. For
2008/09, a further decrease in corn imports is expected. Competition
from Argentina and other suppliers of yellow corn is expected to
continue to be modest in 2008/09; the price gap between U.S. and other
suppliers is expected to be marginal.

## 

## Trade Matrix

+-------------------+--------------+-------------------+--------------+
| **Import Trade    |              |                   |              |
| Matrix**          |              |                   |              |
|                   |              |                   |              |
| Corn              |              |                   |              |
+-------------------+--------------+-------------------+--------------+
| Time Period       | MY2005/06    | Units:            | MY2006/07    |
+-------------------+--------------+-------------------+--------------+
| Imports for:      |              |                   | **1**        |
+-------------------+--------------+-------------------+--------------+
| U.S.              | 4,035        | U.S.              | 3,198        |
+-------------------+--------------+-------------------+--------------+
| Others            |              | Others            |              |
+-------------------+--------------+-------------------+--------------+
| Argentina         | 128          | Argentina         | 689          |
+-------------------+--------------+-------------------+--------------+
| Ukraine           | 9            | Ukraine           | 170          |
+-------------------+--------------+-------------------+--------------+
| Bulgaria          | 33           | New Zealand       | 70           |
+-------------------+--------------+-------------------+--------------+
|                   |              | Uruguay           | 54           |
+-------------------+--------------+-------------------+--------------+
|                   |              | Brazil            | 31           |
+-------------------+--------------+-------------------+--------------+
|                   |              | South Africa      | 24           |
+-------------------+--------------+-------------------+--------------+
|                   |              |                   |              |
+-------------------+--------------+-------------------+--------------+
|                   |              |                   |              |
+-------------------+--------------+-------------------+--------------+
|                   |              |                   |              |
+-------------------+--------------+-------------------+--------------+
|                   |              |                   |              |
+-------------------+--------------+-------------------+--------------+
| Total for Others  | 170          |                   | 1038         |
+-------------------+--------------+-------------------+--------------+
| Others not Listed |              |                   | 20           |
+-------------------+--------------+-------------------+--------------+
| Grand Total       | 4205         |                   | 4256         |
+-------------------+--------------+-------------------+--------------+

# PS & D Rice

<table style="width:100%;">
<colgroup>
<col style="width: 13%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 8%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><p><strong>Rice, Milled</strong></p>
<p>(1000 HA)(1000 MT)(MT/HA)</p></td>
</tr>
<tr class="even">
<td></td>
<td>2006</td>
<td>Revised</td>
<td></td>
<td>2007</td>
<td colspan="2">Estimate</td>
<td>2008</td>
<td>Forecast</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
<td><p>USDA</p>
<p>Official</p></td>
<td><p>Post</p>
<p>Estimate</p></td>
<td><p>Post</p>
<p>Estimate</p>
<p>New</p></td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>10/2006</td>
<td>10/2006</td>
<td></td>
<td>10/2007</td>
<td>10/2007</td>
<td></td>
<td>10/2008</td>
<td>10/2008</td>
</tr>
<tr class="odd">
<td>Area Harvested</td>
<td>668</td>
<td>668</td>
<td>669</td>
<td>675</td>
<td>675</td>
<td>670</td>
<td>675</td>
<td>675</td>
<td>672</td>
</tr>
<tr class="even">
<td>Beginning Stocks</td>
<td>502</td>
<td>502</td>
<td>502</td>
<td>364</td>
<td>255</td>
<td>370</td>
<td>397</td>
<td>438</td>
<td>485</td>
</tr>
<tr class="odd">
<td>Milled Production</td>
<td>4135</td>
<td>4135</td>
<td>4383</td>
<td>4383</td>
<td>4383</td>
<td>4385</td>
<td>4380</td>
<td>4380</td>
<td>4387</td>
</tr>
<tr class="even">
<td>Rough Production</td>
<td>6362</td>
<td>6362</td>
<td>6743</td>
<td>6743</td>
<td>6743</td>
<td>6746</td>
<td>6738</td>
<td>6738</td>
<td>6749</td>
</tr>
<tr class="odd">
<td>Milling Rate (.9999)</td>
<td>6500</td>
<td>6500</td>
<td>6500</td>
<td>6500</td>
<td>6500</td>
<td>6500</td>
<td>6500</td>
<td>6500</td>
<td>6500</td>
</tr>
<tr class="even">
<td>MY Imports</td>
<td>28</td>
<td>0</td>
<td>100</td>
<td>100</td>
<td>100</td>
<td>20</td>
<td>0</td>
<td>100</td>
<td>20</td>
</tr>
<tr class="odd">
<td>TY Imports</td>
<td>28</td>
<td>0</td>
<td>100</td>
<td>100</td>
<td>100</td>
<td>20</td>
<td>0</td>
<td>100</td>
<td>20</td>
</tr>
<tr class="even">
<td>TY Imp. from U.S.</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>4665</td>
<td>4637</td>
<td>4985</td>
<td>4847</td>
<td>4738</td>
<td>4775</td>
<td>4777</td>
<td>4918</td>
<td>4892</td>
</tr>
<tr class="even">
<td>MY Exports</td>
<td>958</td>
<td>1039</td>
<td>1232</td>
<td>1150</td>
<td>1000</td>
<td>900</td>
<td>950</td>
<td>800</td>
<td>947</td>
</tr>
<tr class="odd">
<td>TY Exports</td>
<td>958</td>
<td>1039</td>
<td>1232</td>
<td>1150</td>
<td>1000</td>
<td>900</td>
<td>950</td>
<td>800</td>
<td>950</td>
</tr>
<tr class="even">
<td>Total Consumption</td>
<td>3343</td>
<td>3343</td>
<td>3383</td>
<td>3300</td>
<td>3300</td>
<td>3390</td>
<td>3400</td>
<td>3668</td>
<td>3400</td>
</tr>
<tr class="odd">
<td>Ending Stocks</td>
<td>364</td>
<td>255</td>
<td>370</td>
<td>397</td>
<td>438</td>
<td>485</td>
<td>427</td>
<td>450</td>
<td>545</td>
</tr>
<tr class="even">
<td>Total Distribution</td>
<td>4665</td>
<td>4637</td>
<td>4985</td>
<td>4847</td>
<td>4738</td>
<td>4775</td>
<td>4777</td>
<td>4918</td>
<td>4892</td>
</tr>
<tr class="odd">
<td>Yield (Rough)</td>
<td>9.523952</td>
<td>9.523952</td>
<td>10.07922</td>
<td>9.98963</td>
<td>9.98963</td>
<td>10.06866</td>
<td>9.982222</td>
<td>9.982222</td>
<td>10.04315</td>
</tr>
</tbody>
</table>

## Production

With irrigation water provided free of charge and a much higher
profitability of rice cultivation compared to other traditional summer
crops (i.e. corn and cotton), farmers normally exceed the area targeted
by the government for rice cultivation, despite the prospect of fines of
LE 600/ feddan for those who violate their targeted areas. The
government rarely imposes this fine on farmers.

The total rice area for 2007 is estimated at 670,000 HA, about the same
as in 2006. However, following a sharp decrease in cotton prices in
2007/08, some farmers are expected to replace cotton with rice. Total
rough rice production in 2007 is estimated at about 6.7 million tons.
For 2008, total rough rice production is expected to increase slightly.

## Trade

Egypt is a net rice exporter. It imports a very small quantity of high
quality name-brand packaged rice to sell in up-scale supermarkets. Rice
exports are estimated at 1,231,000 tons during 2006/07. However, for
2007/08, rice exports are expected to decrease to 900,000 tons. This
expected decrease in rice exports is mainly due to the recent decision
by the Rice Exporter's Association members to stop exporting rice
indefinitely. This decision was taken after the consumer price of rice
topped 4 Egyptian pounds/Kg, which is equivalent to about \$730/ton, and
about 30 percent higher than traditional levels. This increase reflects
the high prices for rough rice, which are currently about \$325/ton,
compared to about \$220/ton last year. The steep rise in prices has led
to allegations that some domestic traders are speculating and storing
rice awaiting further price increases. The Association is hoping that
the halt in rice exports will result in traders releasing more rice,
leading to an easing of prices, or at least that it will stop the
increase. No specific time-frame has been set for when exports will
resume.

As of September 15, 2007 (the beginning of rice export marketing year)
through the end of January, 2008, Egypt exported 370,000 tons, about
100,000 tons less than the same period of last year. Due to this slow
pace, plus the announcement of the ban, rice exports in 2007/08 are
forecast at 800,000 tons. The current average export price for Egyptian
rice is \$500/ton FOB.

## Trade Matrix

+-------------------+--------------+-------------------+--------------+
| **Export Trade    |              |                   |              |
| Matrix**          |              |                   |              |
|                   |              |                   |              |
| Rice, Milled      |              |                   |              |
+-------------------+--------------+-------------------+--------------+
| Time Period       | 2005/06      | Units:            | 2006/07      |
+-------------------+--------------+-------------------+--------------+
| Exports for:      |              |                   | **1**        |
+-------------------+--------------+-------------------+--------------+
| U.S.              |              | U.S.              |              |
+-------------------+--------------+-------------------+--------------+
| Others            |              | Others            |              |
+-------------------+--------------+-------------------+--------------+
| Syria             | 214,445      | Syria             | 215,104      |
+-------------------+--------------+-------------------+--------------+
| Turkey            | 153,644      | Libya             | 179,386      |
+-------------------+--------------+-------------------+--------------+
| Libya             | 86,903       | Turkey            | 139,912      |
+-------------------+--------------+-------------------+--------------+
| Ukraine           | 85,899       | Jordan            | 194,430      |
+-------------------+--------------+-------------------+--------------+
| Romania           | 72,425       | Saudi-Arabia      | 61,744       |
+-------------------+--------------+-------------------+--------------+
| Sudan             | 63,733       | Sudan             | 56,377       |
+-------------------+--------------+-------------------+--------------+
| Jordan            | 41,541       | U A E             | 35,486       |
+-------------------+--------------+-------------------+--------------+
| Saudi-Arabia      | 20,145       | Ukraine           | 27,517       |
+-------------------+--------------+-------------------+--------------+
| Lebanon           | 19,923       | Romania           | 26,770       |
+-------------------+--------------+-------------------+--------------+
| Portorico         | 20,480       | Singapore         | 37,716       |
+-------------------+--------------+-------------------+--------------+
| Total for Others  | 779138       |                   | 974442       |
+-------------------+--------------+-------------------+--------------+
| Others not Listed | 260,488      |                   | 257,203      |
+-------------------+--------------+-------------------+--------------+
| Grand Total       | 1039626      |                   | 1231645      |
+-------------------+--------------+-------------------+--------------+

## Consumption and Stocks

Rice consumption is relatively constant, as consumers continue to prefer
wheat based products.

There is no stock-holding policy, with levels reflecting pipeline
supplies.