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GTAP Resource #4763

"Wheat Import Subsidies in the Sudan: Problems and Alternative Policy Options for Poverty Alleviation"
by Siddig, Khalid and Harald Grethe


Abstract
1 Background
About 2.6 million metric tons (MTs) (IndexMundi, 2015) of subsidized wheat is the current amount imported by the three major wheat importers in the Sudan, namely, Sayga, Weeta and S. This amount according to experts is believed to be far more than the domestic consumption of the Sudanese bakeries in terms of wheat flour that is suitable for bread making with the remaining amount being smuggled to neighboring countries.
Sudanese households are vastly moving away from the consumption of traditional cereals such as sorghum and millet towards the consumption of wheat in the form of bread in its different forms. This is driven by urbanization, rural-urban migration and different forms of adopting the city-like life style even in villages and rural areas of the country. This led the imported amount of wheat to grow rapidly specially during the last decade from 0.96 million MTs in 2003 to 1.5 million MTs in 2004 and to 2.6 million MTs in 2014.
Within the government poverty alleviation strategies, all imports of wheat are subsidized. The subsidy is set to guarantee the following:
(1) A fixed price for the consumer of SDG 0.33 (about USD 0.04) per bread (weight of the final piece of bread is 70 grams).
(2) This goes up to the bakeries as they receive the subsidized wheat flour from the three major millers at the price of SDG 120 per 50 kg sacks.
(3) The major milling companies (Sayga, Weeta and S) import the suitable wheat grain from different sources and they receive the amount of the subsidy in the form of a preferential exchange rate. This happens by that the companies deposit the value of their desired amount of wheat imports in local currency (SDG) to their accounts with the Central Bank of Sudan (CBoS) and receive the equivalent foreign currency required for imports. According to experts, the applied exchange rate is almost 50% below the official exchange rate to be counted as a subsidy.
The official exchange rate in the Sudan is 5.98 SGDs/U...


Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia
Date: 2015
Version: Draft
Created: Siddig, K. (4/15/2015)
Updated: Siddig, K. (4/15/2015)
Visits: 2,408
- Economic analysis of poverty
- Agricultural policies
- Food prices and food security
- Africa (East)
- Africa (North)


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