CAIRO, EGYPT — The Egyptian government has announced a decision to import rice to increase supply and avoid a potential price shock to consumers, according to a June 19 Global Agricultural Information Network (GAIN) report from the U.S. Department of Agriculture.

USDA’s Foreign Agricultural Service in Cairo said that the Ministry of Water Resources and Irrigation’s January 2018 measure reducing cultivated rice areas may have led to grain hoarding.

“This has resulted in a decrease in the volume of rice being offered to the country’s subsidy procurement system,” the USDA said.

Although milled and paddy rice prices increased in April, the recent announcement to increase imports caused prices to fall, and the USDA said it anticipates prices will continue downward as the August/September harvest commences and imports start arriving.

Still, the USDA expects a shortfall in supply in marketing year 2019-20, and it sees an opportunity for U.S. paddy rice.

Paddy rice has not been imported in recent years due to the surplus of the local rice production, it said.

“Post understands that while opportunities reside in supplying the Egyptian domestic market, the best prospects are in milling, branding and re-exporting U.S.-origin paddy rice,” the USDA said. “Volumes that could be absorbed by Egypt range from 10,000 tonnes to upwards of 300,000 tonnes.”

Since a recent peak of 4.8 million tonnes in 2016-17, Egypt production fell to 4.3 million in 2017-18 and is forecast to drop to 3.3 million in 2018-19, according to the USDA.

Meanwhile, it forecasts 400,000 tonnes of rice imports in 2018-19, up from 50,000 tonnes in 2017-18.