The Egyptian government is taking steps to control domestic prices by announcing the extension of the sugar export ban for three months, according to Zawya.
Egypt’s rich history in sugar production, dating back to ancient times, is still a prominent feature of its agricultural landscape today. The nation’s dedicated farmers cultivate both sugarcane and sugar beet across a sprawling expanse of 1 million feddans, accounting for 6.5% of the country’s total cultivation area. This substantial effort results in refined sugar used for both domestic consumption and international exports.
However, recent developments have introduced a significant disturbance to the Egyptian sugar market, leading to a notable price shock. In this comprehensive fact sheet, we aim to provide a detailed overview of the key facets of the Egyptian sugar market. We will also spotlight Egypt’s global standing in the sugar production arena and delve into the reasons behind the current surge in sugar prices.
In the production landscape for the 2022/23 period, global raw sugar output reached an impressive 177.28 million tonnes. The top three sugar-producing nations were India, Brazil, and Thailand, contributing 19.3%, 15.6%, and 8.3%, respectively. In contrast, Egypt occupied the 12th position among the world’s sugar producers, holding a share of 1.6% in the global sugar production pie.
Egypt’s sugar production for the 2022/23 season reached 2.76 million tonnes, marking a modest annual decline of 3.3%. Of this total, 53% was derived from sugar beets, while the remaining 47% originated from sugarcane. Projections indicate a slight uptick in Egypt’s sugar production for the 2023/24 period, expected to grow by 1% year-on-year (YoY) to reach 2.785 million tonnes.
Egypt’s sugar industry comprises 15 sugar processing companies, with eight dedicated to sugarcane processing and seven to sugar beet processing. Notably, all eight sugarcane processing companies are state-owned, while three out of the seven sugar beet processors are privately operated, with the remainder under state control.
With domestic sugar consumption reaching 3.68 million tonnes in the 2022/23 season, there emerged a market gap filled by imports amounting to approximately 830,000 tonnes. Forecasts predict that sugar consumption will rise to 3.78 million tonnes in the 2023/24 period. This increasing demand, coupled with a decline in domestic supply, is anticipated to expand the market gap to 930,000 tonnes.
In terms of imports, Egypt imported sugar valued at $200 million, with an overwhelming 86.9% of these imports originating from Brazil. Other notable suppliers included the European Union (EU) and India.
Interestingly, despite being a net sugar importer, Egypt still manages to export a portion of its sugar production to the international market. In 2022, Egypt’s sugar exports totaled $189.3 million. The leading importers of Egyptian sugar were Turkey, claiming a share of 20.8%, followed by Palestine with 17.5%, and Kenya with 13.9%.
Recent developments have led to an unprecedented surge in sugar prices within Egypt, with rates reaching EGP 35-40 per kilogram. This surge in prices was primarily attributed to heightened demand during “El Mawlid El Nabawy.” However, this surge was not solely the result of increased demand, as the 2022/23 sugar beet crop was plagued by an outbreak of Rhizomania disease, anticipated to affect approximately 10% of Egypt’s harvest.
In response to the escalating prices, the Egyptian government has taken steps to regulate the domestic market. These measures include extending the ban on sugar exports for an additional three months, commencing on September 20th. Additionally, the government has announced plans to import 200,000 tonnes of sugar to ensure adequate strategic reserves for at least six months.
