Egypt, the world’s largest wheat importer, is being asked to consider a wheat storage program offered by a U.S. company before Algeria gets a chance to grab the $250 million investment.
Blumberg Grain expects to reach an agreement with Egypt in the next two weeks to expand its wheat storage network, according to a company statement issued Sunday. A resolution is needed “as soon as possible as there are other countries competing for the investment program,” the company said. Egypt stands to save $550 million a year of wheat now lost every year from waste, according to Blumberg.
“There are a number of countries competing for the investment program, for example Algeria” which “has expressed strong interest,” David Blumberg, chief executive officer of Blumberg Grain – Middle East & Africa, said by phone on Sunday. “We have a $250 million investment allocation towards the region.”
Wasted grain is a big problem for Egypt, where rising food prices intensified unrest that led to the overthrow of the government during Arab Spring protests in 2011. Wheat from local farmers is often stored in open-air pits, with as much as half of the crop lost each year to pigeons, rodents and thieves scavenging national stockpiles, according to Blumberg. The country spends billions of dollars on grain each year for a subsidized bread program to ensure its people can afford food.
Blumberg has completed the first phase of its project in Egypt, installing 93 steel sheds, each able to hold 8,000 metric tons of grain, according to Blumberg. The second phase includes building 300 warehouses storing 2.35 million tons of locally grown grain, Blumberg said Sunday. The sites will clean, weigh, bag and monitor grain as it moves from warehouse to flour miller, he said.
Egypt’s economy stands to gain $8 billion over the next five years from the program as it would generate hard currency from exports, according to the Blumberg statement.