EGYPT – Sugar will now be part of the commodities traded at the Egyptian Commodities Exchange, Daily News Egypt has reported citing the head of the platform Ibrahim Ashmawy.
Ashmawy said that the offering aligns with the Egyptian state’s policy that leans towards the regulation of strategic and basic commodity markets.
Sugar trading also supports the government’s efforts to provide commodities in equal and transparent competition, and control commodity markets.
It will also stabilize their prices by establishing a direct trading relationship between each of the producers of commodities, manufacturers, and all elements of supply chains, Ashmaw explained.
The Egyptian Commodities Exchange announced the need for companies operating in sugar commodities to register their membership in the Egyptian Commodities Exchange.
The EME was established in January 2020 via a partnership between the Egyptian Exchange, the Internal Trade Development Authority, and the General Authority For Supply Commodities.
Ashmawy elaborated that the sugar commodity will be the fourth commodity to be offered for trading on the Egyptian Commodities Exchange.
After the successful offering of wheat and yellow corn commodities, Ashmawy concluded that other commodities are being studied to be offered for trading on the Egyptian Commodities Exchange.
Sugar prices in Egypt have been rising despite the government’s best efforts to regulate the commodity. In March 2023, the government applied a three-month ban on all types of sugar exports as a precautionary measure to secure sufficient sugar for domestic consumption.
This has not helped as the price of sugar in Egypt has surged by approximately 26% in recent weeks, rising to EGP 24,000 per ton compared to its initial value of EGP 19,000 in early July, according to Hassan Al-Fendi, the head of the Sugar Division at the Federation of Egyptian Industries (FEI).
Despite this price increase, officials have reassured the public that Egypt has strategic reserves of sugar that will sufficiently meet consumption needs until the spring of 2024.
The government has also tendered to import raw sugar through the Egyptian Sugar and Integrated Industries Company (ESIIC), which most recently is believed to have purchased around 50,000 metric tons of raw sugar in an international tender that closed on Aug. 5.
Medhat Nafei, former advisor to the minister of supply and internal trade, however, believes that the solution to higher sugar prices lies without the commodities exchange platform.
“Trading on a secondary market like the EME will not solve the current shortage in the sugar in the market, which was resulted by prioritizing cultivating wheat over sugarbeet, the main input in most of Egypt’s production of sugar,” Nafei warned.
He added that to tackle the shortage, the government should ban sugar exports and work on increasing imports.
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