Agriculture opportuiniites

An Expert's View about Agriculture and Animal Husbandry in Egypt

Posted on: 28 Sep 2012

Egypt’s success in developing its agricultural sector has been due in part to irrigation programs, price incentives for farmers.

Agriculture opportuiniites in Egypt Egypt is the largest country in the Arab world with a population estimated to be over 84 million. 50% of the population are under 25 years of age. Market overview Egypt has a strategic location in the centre of the Middle East and North Africa (MENA) region (800 million people) and has links to the three continents of Asia, Africa and Europe. It is the hub for the world’s maritime traffic with commercial ports on the Mediterranean and Red Seas. ξ Egypt is a signatory to many regional and international Free Trade agreements which reduce or waive completely the custom duties on exported/imported goods. ξ According to Business Monitor International reports “Egypt has the greatest potential as a consumer market in the Middle East and North Africa and is also one of the favourite emerging markets” ξ Egypt was designated a priority market under UKTI’s five-year strategy announced in May 2011 - “Britain Open for Business. ξ Egypt’s agriculture production is mainly cotton, rice, corn, wheat, beans, fruits, vegetables, cattle, water buffalo, sheep, goats ξ Major agricultural exports are crude oil and petroleum products, cotton, textiles, metal products. Egypt is the world's largest wheat importer. ξ Major agricultural imports are machinery equipment, foodstuffs, chemicals, wood products, fuels. ξ Egypt has the world’s most productive cultivation of rice (3.8 tons per acre), cane sugar (50 tons/acre) and sorghum (1.9 ton/acre). ξ Egypt’s success in developing its agricultural sector has been due in part to irrigation programs, price incentives for farmers. ξ Egypt imports approximately 95% of its agricultural equipment and the balance is locally produced. However, the quality of local production cannot compete in global markets. Key opportunities ξ Advances in Post Harvest Technology: Technology transfer to help Egyptians to grow crops in the desert in silica "glass pebbles", which greatly reduces the need for water. ξ Silos: In order to increase the storage capacity, the government is promoting a project to the private sector. This project encourages the private sector to build 50 inland silos with 30,000 MT capacities in different locations throughout the country and Ministry of Supply and Social Affairs will then commit to using 60 percent (90,000 MT) of each silos capacity at the prevailing storage fee for 5 years. ξ Slaughterhouses: Egypt produces 2 MT of poultry per year and has a capacity of 500,000 MT slaughterhouses. To encourage the private sector to invest in this industry, the government has signed a joint agreement with a Kuwaiti fund to provide $90 million in credit facilities. ξ Meat imports: Imports of meat were banned. On request from the EU, the government agreed to permit meat imports (with certain conditions) from EU countries. The country produces 70 % of its red meat requirements, with annual imports reaching 400,000 tons (meaning that Egypt's annual consumption of red meat is now estimated at 1.3 million tons). ξ Fisheries: The government hopes to increase annual production of fish catch to meet expected demand of 1.4m tons. This is planned by managing natural fish stocks and encouraging the use of the country's inland lakes and waterways for intensive aquaculture. ξ Fertilisers: The fertilizer market of Egypt is booming due to the growing demand from the agricultural sector. The country's central geographical position and the availability of cheap gas have helped Egypt attract international players. Inviting investors to build fertilizer production units and use the country as a convenient export base. ξ Agriculture Equipment: Egypt encourages the private sector to invest in this industry. Demand in Egypt’s agri sector is mainly for the following equipment: irrigation equipment, harvesting and threshing machinery, vine harvesting equipment, till tunnel vineyard sprayers, tillage equipment, spreaders for manure, grain and pressure bins, agriculture packing equipment, crop dryers, Pop-up sprinklers and landscape and golf course equipment. ξ Wheat Supply: Egypt, the world’s top wheat importer, is heavily dependent on wheat. Egyptians consume more than 12 million tons of wheat yearly, consuming large quantities of bread and pasta. Given the generally low incomes and low per capita spending on food, cereals such as wheat, corn, sorghum and rice make up the bulk of the Egyptian diet, providing over 72% of daily energy and protein supplies. The government subsidises the popular Baladi flat bread in order to make daily bread accessible to even the poorest in society. Despite government plans to increase planted areas of wheat, the growth in wheat production in Egypt is still not enough for Egypt’s consumption and the Egyptian wheat is suitable only to make Baladi bread. An opportunity for future purchasing of UK wheat exists especially due to the UK being within Egypt’s approved list of supplying countries. Latest export opportunities in the Agriculture sector Latest export opportunities in Egypt Getting into the market Egypt is an attractive market that can offer major business opportunities to informed traders and investors. Trade and investment between the UK and Egypt is promising. However it is not always an easy market. A successful entry into Egypt will be determined by the quality of the information and advice upon which the decision to enter is based. Continued success is also dependent upon the ability to navigate the laws and practices of Egypt. The Egyptian market requires careful study and a sustained sales effort. There is strong competition from other exporting countries. Price and credit terms are a deciding factor when obtaining contracts, though quality is increasingly important. Back-up servicing facilities and the supply of spare parts is also important. Having a local partner can be vital to successful penetration of this market. There are several reasons for this. Firstly, given the continuing bureaucracy, a local partner can shepherd the foreign business through the delays and obstacles. Secondly, foreign companies require a local agent to bid for government tenders. Thirdly, as the Egyptian market becomes more sophisticated there is a growing demand for after sales service, which a local agent can convincingly provide. In general, British products and services are very highly regarded in Egypt for their quality. The main obstacle facing the growth of British involvement in the Egyptian market is that British products have a reputation as being expensive compared to some foreign products. This has lessened slightly over the past year as exchange rate fluctuations have been in favour of UK exporters. British companies wishing to develop their business in the Egyptian market are advised to undertake as much market research and planning as possible in the UK. More about doing business in Egypt Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits through our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. ξ Marwa Hussein, British Embassy Cairo. Tel: + 202 2791 6000 or email: Gary Hunt, British Embassy Cairo. Tel: + 202 2791 6000 email: UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events in the Agriculture sector Major Events Agrena 2013. Organiser: Crose Co. E Mail: Web: International Conference and exhibition of the technology in grain industry & products1-3 March 2013 Mail: Web: From Agriculture to Retailing November 28-29, 2012 Conrad Cairo Hotel Mail: Web Site: Useful links More about OMIS and other UKTI services for exporters
Posted: 28 September 2012

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