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Jordan Cereal Import Requirements to Remain High

18 July 2013

JORDAN - Jordan’s domestic cereal production is negligible owing to climatic and geographic conditions.

Over 97 percent of domestic food and feed requirements are satisfied by imports. Cereal import requirements in 2013/14 (July/June) are forecast to exhibit a slight increase of about 5 percent on the 2012/13 level of 2.19 million tonnes, reports the FAO.

Wheat imports are estimated at about 800 000 tonnes, about the same level as the last five years average during which the policy change of higher strategic stocks was implemented.

Following the price hikes of 2007/08, Jordan increased its strategic reserve of wheat from 3 to 10 months in Jordan and on sea, equal to 450 000 tonnes in silos and 200 000 on sea and at the Aqaba port as a precaution against future increases in food prices.

In the same period, imports of barley (for feed) are expected to go up by about 10 percent, compared to the average, to 780 000 tonnes to match the increasing demand. Subsidised barley is distributed to herders according to actual number of tagged sheep and goats.

An average level of about half a million tonnes of imported maize is also forecast for animal feed, mostly poultry and cattle. Rice imports are forecast to remain stable, at about 170 000 tonnes.

Consumer price index increasing in 2013 as Government streamlines the fuel subsidy system

According to the national Department of Statistics, the monthly rate of food price inflation (year-on-year) reached 4.4 percent in June 2013, fueled by high increases in vegetable prices which increased by over 14 percent.

By contrast, bread and cereal prices declined by 1.4 percent due to Government support schemes that prevented the transmission of high international wheat prices to local markets. Meat and poultry prices, usually a significant contributor to the overall food price inflation, increased by 6.4 percent.

The gradual removal of fuel subsidies has put upward pressure on prices in 2013, with average total inflation in 2013 so far reaching almost 7 percent. “Fuel and lighting” category increased by 25 percent year-on-year.

While fuel prices were raised in November 2012 (saving about USD 705 million), electricity price increases for domestic and small users were postponed until 2014.

As part of a USD 2 billion IMF stand-by arrangement approved in autumn 2012 and reviewed by the IMF in early March, leading to the release of a second tranche (of USD 385 million) of funding, the government has agreed to introduce a number of structural reforms.

Despite the budget deficit, wheat bread remains fully subsidised with bread price fixed at USD 0.22 per kg. Bakeries are provided with subsidised flour.

TheCropSite News Desk

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