* Faces obstacles in boosting self-sufficiency
* UAE launched silos project last year
* Government has lowered target for local wheat purchases this year
CAIRO, June 10 (Reuters) - Egypt, the world's largest wheat importer, wants to be a "global logistics hub" for grain storage by securing its own strategic reserves and exporting locally made flour to other Arab states, the supply minister said on Tuesday.
Khaled Hanafi said after meeting with Chinese officials that Cairo hopes to boost cooperation with Beijing and tap China's expertise in grain logistics and transport systems.
The meeting covered "aspects of cooperation between Egypt and China in the field of silo construction and storage of agricultural products," according to a ministry statement.
Egypt's government is striving to boost self sufficiency and cut its 32 billion Egyptian pound ($4.48 billion) food import bill.
Experts says Egypt's ability to buy more wheat locally is limited not only by storage and transport issues, but also by peasant farmers who need to reserve a significant portion of their yearly crop for seeds and to feed their families.
Egypt is making progress in increasing local storage capacity with the help of one of its major Gulf Arab backers, the United Arab Emirates.
The UAE has committed to funding the construction of 25 silos to boost storage capacity by 1.5 million tonnes.
Egypt's own efforts to build 50 new silos, also with a capacity of 1.5 million tonnes, have dragged on for years.
Egypt had aimed to purchase 4.4 million tonnes or about half of its domestic wheat harvest this year but Hanafi on Monday lowered the target for state purchases to 3.8-3.9 million tonnes, on par with purchases during the past two harvest seasons.
This suggests that Egypt will not cut its food import bill in the coming fiscal year.
The harvest is now in full swing in northern parts of the breadbasket region of the Nile Delta and nearly finished in fields further south. Government wheat purchases of the crop will end next month.
(Reporting by Maggie Fick; editing by Jason Neely)
((maggie.fick@thomsonreuters.com)(+20 120 640 2000))
Keywords: EGYPT WHEAT/CHINA
