20100907
africanews

CAIRO (Reuters) - Egypt, the world's biggest wheat importer, faces a higher bill for bread subsidies in the next year but has adequate financial resources and stocks to avoid any rerun of the violent protests of 2008.

Egypt raced to redo orders after drought-hit Russia halted grain exports in August, which sent wheat prices surging. Cairo had booked 540,000 tonnes of Russian wheat from July until then.

The speed at which it has refilled its wheat order book reflects a determination to avoid any shortages of subsidised bread on which many poor people in the country of 78 million depend. The government has repeatedly said supplies are secure.

Shortfalls two years ago, coupled with rising prices of other commodities, led to clashes between protesters and police.

In Egypt, securing basic staples is politically sensitive at any time, but analysts say the government is particularly wary now because it wants to head off any kind of unrest before parliamentary and presidential elections this year and next.

"I do not see the situation escalating to public unrest and riots similar to what happened in 2008, because international wheat prices are not rising to 2008 levels," said Magdy Sobhy at the Al Ahram Centre for Political and Strategic Studies.

Wheat prices surged in 2008 after several years in which global consumption of wheat had outstripped production.

But a Western industry expert based in Cairo said the latest price rise followed a couple of record global harvests, with supplies outpacing demand, so prices are unlikely to rise as high as that.