Friday, February 15, 2008
Corruption sleuth Rasha Abu Zeki exposes the wheat and flour cartels and the government's "inefficiency" in the economics page of Al Akhbar. If you can read Arabic, do not miss this one! Apparently, the government (Haddad again) called for bids to import 50,000 ton of wheat. They were won by 2 companies (25,000 tons each). One company imported from Kazakhstan at $457.90 per ton. The other paid slightly less for Russian wheat. Why did the government buy wheat by bids and then distribute it to the mills? Because the mills cartel offered to import wheat for $420 per ton a price it thought to be too high! So now the government is paying more for it from the "market". Isn't there something wrong here? As a result, the government subsidizes the mills and the bakeries to the tune of $4.65 millions per month from the taxpayer's money. But it gets worse: Rasha reports that Egypt is importing bread wheat from Kazakhstan for...$250 per ton while we are paying $457.9 for the same wheat!