Jordan: Gov't buys 100,000 tonnes of wheat to shore up supply
Posted by Zawya
Jordan Times
13 August 2010


AMMAN - Jordan on Thursday purchased 100,000 tonnes of wheat from Germany at a cost of $328 per tonne, Minister of Industry and Trade Amer Hadidi said.

Reiterating that the Kingdom's stored quantities of wheat are enough for six months, the minister indicated that the new order will cover the country's needs for another two months and that the government will continue importing wheat to increase the country's reserves in accordance with storage capacity.

"Despite the rise in international wheat prices, which will increase the cost of the government bread subsidy, we will continue supporting bread with the same mechanism," Hadidi told reporters on Thursday, noting that the last order of wheat the ministry purchased was priced at $297 per tonne.

Finance Minister Mohammad Abu Hammour said in previous remarks to The Jordan Times that the rise in wheat prices is expected to cost the treasury an additional JD45 million, to be added to the current wheat bill of around JD150 million.

According to the Food and Agriculture Organisation, international wheat prices have jumped by over 50 per cent since June.

This rapid increase, caused by a drought affecting crops in the Russian Federation, coupled with lower than anticipated outputs in Kazakhstan and Ukraine, is prompting concerns about a repeat of the world food crisis of 2007 and 2008.

President of the Bakery Owners Association Abdul Ilah Hamawi said that absent the government subsidy, bread prices would be three times higher.

The government subsidises each tonne of flour with JD181 and due to this support, the cost to bakeries is only JD77 per tonne, Hamawi explained.

Current prices of bread are JD0.16 per kilogramme, whereas if the product were not subsidised by the government, the price of each kilo of bread would stand between JD0.45 and JD0.50.

By Omar Obeidat

© Jordan Times 2010

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