EGYPT – Egypt, one of the leading sugar producers in Africa is expected to registered a rise in output of the commodity in Marketing Year (2021/22) by approximately 2.6% to reach 2.85 million metric tonnes (MMT), as compared to the MY 2020/21 estimate of 2.78 MMT.

Of this total forecast, 1.58 MMT of sugar will be derived from sugar beets, while 1.27 MMT will be sourced from sugarcane, indicates USDA in a GAIN report.

The rise in production is attributed to the farmers expanding planted area to meet demand, following new processing facilities going online and good procurement prices of the raw materials.

According to the report, there will be a slight increase in the sugar cane harvested area to 135,000 ha, an increase of almost 4%, compared to last year; while sugar beet area harvested will also increase by 4% to 265,000 ha.

Overall, post expects sugarcane production to reach 14.2 MMT, approximately 300,000 MT above last year’s estimate and sugar beet production is expected to reach 11.34 MMT, a 3.7 percent jump.

In Egypt, there are 15 sugar processors, eight processing sugarcane and seven processing sugar beet, 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. The processor under development will be private sector-owned.

Egypt’s total sugar domestic consumption is set to increase by 2.6 percent

Local sugar consumption to rise with expansion of confectionary sector

Meanwhile, total sugar domestic consumption is set to increase by 2.6 percent or 90,000 MT to reach 3.43 MMT.

The rise is driven by population growth, estimated at 2.4 percent per annum and the expansion of the confectionary food products sector which is demanding higher sugar inputs.

Despite a rise in local production, the North African country is expected to import 830,000 MT of sugar.

However, imports are expected to remain unchanged from last year due to a steady production increase which compensate for the increase in the total demand.

The majority of 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.

To this end, the government intends 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.

Despite the ban, sugar importers are still able to import given that they obtain an import permit from the Ministry of Trade, to meet the difference between production and demand.

The North African country produces almost 80 percent of domestic sugar consumption demand and imports the remaining 20 percent.

In 2020, Egypt imported 8.3 MMT, with Brazil supplying 80 percent of Egypt’s imports of raw sugar. Brazil is likely to remain Egypt’s main raw sugar supplier in MY 2021/22.

Egypt also supplies its neighbouring countries with the commodity i.e., Sudan and Kenya absorbing 50% of the exports. In MY 2021/22, the country will export 300,000 MT.

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