CAIRO, April 19 (Reuters) - Egypt has purchased 10,000 tonnes of wheat from farmers in the first five days of the local procurement season, the supply minister said on Tuesday.
Egypt, the world's largest wheat importer, is planning to buy 4 million tonnes of Egyptian wheat in the local season which started on Friday.
Farmers are being paid a fixed price of 420 Egyptian pounds ($47.30) per ardeb (150 kg) of wheat after abandoning plans to reform its wheat farmer subsidy system.
The new system would have paid a smaller direct subsidy to farmers before purchasing their wheat at global rates.
The higher fixed price, well above global market rates, is meant to encourage farmers to grow wheat but has previously led to smuggling involving the sale of cheaper imported wheat to the government falsely labelled as Egyptian.
Egypt's wheat harvest begins in April and runs through July. Last year the government said it procured a record 5.3 million tonnes of the grain, up from 3.7 million the year before.
Industry players have said that last year's record procurement was the result of falsely labelled foreign wheat and that it drained nearly 2 billion Egyptian pounds ($255 million at exchange rates at the time) from the government budget.
The supplies ministry has repeatedly denied this.
The government nonetheless announced a series of new measures this month to tighten control of wheat circulation during the harvest.
Wheat can no longer be traded domestically during the harvest season without permission and cannot be transported between governorates.
The government has also said it will closely monitor shipments of wheat entering the country.
($1 = 8.8799 Egyptian pounds) (Reporting by Maha El Dahan and Eric Knecht; editing by Jason Neely)
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