Egypt nears actualization of self-sufficiency in sugar production to satisfy growing local demand

EGYPT – Egypt has reached 90 percent self-sufficiency in sugar production thanks to a steady production of sugarcane and expansion of sugar beet production in the recent past.

In the marketing year (MY) 2022/23, USDA in a GAIN report expects sugarcane production to reach 14.3 MMT, approximately 105,000 MT above last year’s estimate.

This is attributed to the slightly increased harvested area and improved yields due to continued access to better fertilizers.

Meanwhile sugar beet production is expected to reach 11.77 MMT, 3.7 percent over the previous period’s output.

Many farmers have been incentivized to engage in beet production following the recent establishment of new sugar beet processing plants thus increasing demand for raw beets.

Also, in January this year, the government kick started the Egypt Future Developmental Project, aimed to produce strategic commodities including sugar beets in the New Delta extension of Dabaa, with 35,000 feddans allocated for production.

With the rise in production of the raw materials, the North African country is set to register a rise in production of sugar by approximately 2.5 percent, or 70,000 MT to reach 2.92 MMT during the period under review.

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Of this total forecast, 1.64 MMT of sugar will be derived from sugar beets, while 1.28 MMT will be sourced from sugarcane.

In Egypt, there are 15 sugar processors, eight processing sugarcane and seven processing sugar beets, plus one under development.

All eight sugarcane processors are state-run companies affiliated with Ministry of Supply and Industrial Trade’s (MoSIT) Holding Company for Food Industries (HCFI). Of the seven sugar beet processors, three are private sector and the rest are state-run companies.

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Confectionary makers drive local demand of sugar

Meanwhile, total sugar domestic consumption is expected to increase by 1.6 percent or 55,000 MT to reach 3.48 MMT.

The rise in local demand is driven by population growth, estimated at 2.4 percent per annum. Egypt with a population of 106 million (est., 2022) is adding roughly 2 million people per year.

Additionally, the expansion of the confectionary food products sector is demanding higher sugar inputs.

With consumption rate being slightly higher than local production, Egypt is set to turn to imports shipping into the country 830,000 MT of sugar.

Imports are expected to remain unchanged due to a steady production increase which will compensate for the increase in the total demand.

Most sugar imports are usually imported through the Egyptian Sugar and Integrated Industries Company (ESIIC), which operates as a subsidiary of HCFI.

In June 2020, the Ministry of Trade and Industry issued a decree to temporarily ban sugar imports, including refined and raw sugar, for three months, subject to renewal. The decision was renewed and is still in effect.

This decision came in light of the COVID-19 crisis and the subsequent downturn in global oil prices that also led to a 30 percent decline in sugar prices – especially raw sugar prices. The government intended to protect domestic industry from imports.

The decree exempts white sugar imported for the pharmaceutical industry, though it is still subject to approval by the Ministry of Health.

Due to trade ties, Egypt is set to export 300,000 MT of sugar with Sudan and Kenya absorbing 50 percent of the country’s sugar exports.

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