Egypt says sellers who 'hide' rice from customers risk prison

Move announced after the government became aware that some producers and salesmen were withholding their supplies to drive up prices

Rice is harvested in a field in Qaha, north of Cairo. Reuters

Egyptian producers and sellers of rice who withhold their supplies will now face prison sentences and large fines, the government said on Wednesday, in an attempt to stop them cornering the market amid a sharp rise in food prices.

After its monthly meeting, Egypt’s council of ministers decided to label rice a strategic good and warned those who “withhold it from circulation, whether by hiding it or not offering it for sale or refraining from selling it, or in any other way.”

According to the cabinet’s directive, which will remain in effect for the next three months or until it is repealed by the government, rice producers, distributors, suppliers and sellers must also report to the supply ministry with the amounts and kinds of rice in their possession.

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  Farmers plant rice seedlings in Egypt's fertile Nile Delta at Tanta, Al Gharbia governorate, about 100 kilometres from the capital Cairo. All photos: EPA

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  Farmers plant rice seedlings at Tanta. The crop requires large quantities of water.

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  The Egyptian government has reduced the cultivation of some crops with high water requirements.

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  The area of rice cultivation is being affected by this strategy.

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  Farmers plant rice seedlings in a waterlogged field at Tanta.

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  Producers are said to prefer growing rice to some other crops as it is easier to cultivate.

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  Other attractions include lower production costs, higher profits and storability for long periods.

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  But the Egyptian government is concerned that the Grand Ethiopian Renaissance Dam project could affect water supplies from the Nile reaching Egypt.

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  Farmers planting rice seedlings in Tanta are joined by egrets looking for small creatures to feed on.

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  Farmers push a trailer stuck in mud while planting rice in Tanta.

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  A farmer is joined by egrets while planting rice seedlings in Tanta.

The decision was taken after the government became aware that some producers and salesmen were withholding their supplies to drive up prices and sell them for higher profits later.

First time violators of the directive will be punished with at least one year in prison and a fine of no less than 100,000 Egyptian pounds ($4,084) and no more than 2 million pounds, or the value of the rice they withheld from the market, whichever is higher.

Repeated violations will be punished with at least two years in prison and double the first fine.

Violators will have to pay for two announcements of their misdeeds in two widely-circulated newspapers, according to the cabinet's statement.

The directive also issued a price cap of 18 Egyptian pounds per kilo on all the nation’s rice sellers.

Amid rising inflation, which increased to an annual rate of 16.2 per cent last month, according to Egypt’s state-run statistics agency Capmas, food prices have reached all-time highs, with a kilogram of rice now being sold for between 17 and 20 Egyptian pounds, compared to 8 pounds at the same time last year.

Imported rice is sold to holders of state-issued ration cards for 10.5 Egyptian pounds per kilogram.

The Arab world’s most populous nation’s inflation rate has risen steadily every month since Russia invaded Ukraine in February, which resulted in a sharp surge in food and energy prices.

Food and beverage costs constitute the largest single component of the country’s inflation basket.

Once a rice exporter, Egypt cut its production in 2018 to save water and issued an international rice buying tender.