Oilseeds and Products Annual in Egypt

An Expert's View about Crops and Support Services in Egypt

Posted on: 10 Aug 2010

Total Egyptian oilseed production declined in 2009/2010 by about 11 percent from the 2008/2009 level.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Required Report - public distribution Date: 5/3/2010 GAIN Report Number: Egypt Oilseeds and Products Annual Oilseed and Products Annual Approved By: Jonathan P. Gressel Prepared By: Cynthia I. Guven & Sherif I Sherif Report Highlights: Vegetable oil import demand is forecast to rebound strongly in 2010/11 from low levels caused by the impact of the global financial crisis. Egyptian cottonseed production is forecast to increase in 2010/2011 as farmers plant more cotton. Soybean imports will continue their upward trend due to increasing demand. Executive Summary: Total Egyptian oilseed production is forecast to increase as farmers plant more cotton. Imports of edible oil decreased in 2009/2010 by about 30 percent as a result of the global financial crisis. However, imports are expected to rebound about 15 percent in 2010/2011 as a result of the recovery of the global market. Commodities: Select Author Defined: Production Total Egyptian oilseed production declined in 2009/2010 by about 11 percent from the 2008/2009 level. However, total oilseed production is forecast to increase by 37 percent in 2010/2011 due to the expected increase in cotton production. Egyptian farmers are expected to plant more cotton in 2010/2011 as a result of the declining prices of other competing crops. Soybeans and sunflowers area and production are forecast to remain at current levels in 2010/2011 seasons. Egypt?s major constraints to increase oilseed production will continue to be the scarcity of arable land, water and relatively limited returns compared to other crops. Cotton is the major oilseed grown in Egypt. It is produced primarily for fiber, with oil and meal production being of secondary importance. Soybeans and sunflowers also are cultivated, but on a much smaller scale. All oilseed production is flood irrigated, and all irrigation water is provided free of charge. Fertilizers are marketed without government intervention. The government sells cottonseed to farmers, at LE 3.60/kg. Cotton: In 2009/2010, cotton production decreased about 11 percent from the previous year because of the farmers? negative response to declining cotton prices. Expectations are for a larger crop in MY 2010/2011 since prices for competing crops are also declining and there is higher export demand for cotton. Sunflower: The total area planted to sunflowers is stagnant at 3,000 HA. The stagnation was due mainly to farmers reducing their planted acreage in response to the lower price paid to farmers by the crushers in Egypt. It is expected that planted area will continue at the same level in 2010/2011. Soybeans: The total area planted to soybeans declined in 2009/2010 to 7,000 HA from 10,000 HA in 2008/2009. Further decline in soybean area is expected for 2010/2011. As in the case of sunflowerseed, the decline in area was primarily the result of the low price paid to farmers by the soybean processors. In addition, increased plantings of berseem (clover), with a prolonged growing season, make it more difficult for soybeans to fit into the crop cycle. The return from soybean production is less than other competing crops such as berseem, wheat, and beet. Consumption Egypt?s annual oilseed crushing capacity is currently estimated at 1.8 million tons. About 60 percent of Egypt?s crushing capacity is owned by public sector companies. The rest is operated by private sector firms. In 2009/2010, total oilseeds crushed were an estimated 1,772,000 MT, as compared to 1,700,000 MT in 2008. In 2010/2011 total oilseeds crushing is expected to increase by about 3 percent as a result of increased oil and meal demand. Trade and Prices Imports of soybeans are expected to rise by 10 percent in 2010/2011 over the 2009/10 USDA estimate, in response to anticipated recovery of poultry industry, and the increase demand from the aquaculture sector. The current average price for imported soybeans is $290 per MT/C&F. much lower than the $380 per MT/C&F price during the last half of MY2009. U,S. soybeans are generally favored over Argentinean beans because of the higher protein content, while Brazil?s darker beans produce a darker meal that raises quality concerns in the poultry industry. The American Soybean Association (ASA) continues to promote the utilization of soy products in poultry, cattle and recently aquaculture feed. Through a series of seminars for the end users, and field experiments, ASA has been able to demonstrate that the use of soy products in feed rations leads to improved production and reduces costs overall . These activities have been effective in educating end-users to the diverse uses and benefits of soybeans in animal feed. Hi-protein and full fat soy meals are gaining popularity thanks to ASA efforts. Tariffs With the exception of cottonseed, virtually all oilseeds can be imported freely into Egypt. The current tariff rate for soybeans, sunflower seed, linseed, palm kernel, and sesame seed, is zero from all sources. OIL MEALS Production The production of cotton meal declined in MY 2009/2010 as a result of a drop in the production of cotton. However, cotton meal is forecast to increase in 2010/2011 as a result of the expected increase in cotton production. Soybean meal production increased in MY 2009/2010 due to increased oil and meal demand. A further jump in soybean meal production is expected in 2010/20011 as the poultry industry continues to recover. Sunflower meal production is forecast to remain at current levels. Consumption The demand for meal, especially soybean meal increased in MY 2009/2010 due to the modernization of the livestock industry in Egypt. The poultry sector, which was badly affected by outbreaks of avian influenza is slowly starting to recover. That improvement in the sector should contribute to a higher demand on soybean meal in 2010/2011. Most soybean meal is utilized in poultry rations, while cottonseed cake and to some extent sunflower meal are used in livestock feed. The aquaculture industry also is beginning to expand and modernize, and many farms have begun using high quality feed rations based on protein meals, primarily soybean meal. Trade Soybean meal continued to be the only meal imported into Egypt in 2009/2010. The total quantity imported was 250,000 MT, of which 92,000 MT was sourced from the U.S, the balance of imports was from South America, mostly Argentina. In 2010/2011, import levels are forecast to decrease to about 230,000 MT due mainly to the increased crushing capacity of the main crushing soybean plant. However, the U.S. share is expected to slightly increase as its price is expected to be competitive. U.S. soybean meal is currently imported at $360 per MT C&F for 44 percent protein, compared to $355 per MT C&F from South America. Tariffs Oil cake and other meals extracted from vegetable oilseeds are subjected to an import duty of 10 percent. This tariff was imposed some years ago and it is true for all sources. OILS PRODUCTION It is expected that cotton seed oil production will increase due to the anticipation of a larger crop of cotton in MY 2010/2011. All imported palm oil is processed into ghee (shortening). A small part is refined before being packaged for direct household consumption. Egypt does not produce any palm oil. It is mostly imported from Malaysia and some from Indonesia. Most domestic soy oil production is purchased by the government for the subsidized ration. Crushers may only make a small return off the oil, so their profits mainly come from the meal. Consumption and Prices Total consumption of vegetable oils in MY 2009/2010 is estimated at 1,599,000 MT compared to 1,779,000 MT in MY 2008/2009. However, for MY 20010/2011, imports are forecast to increase as a result of the recovery of the global market, which was affected badly by the financial crisis. Egyptian per capita consumption of oils is estimated at slightly over 20 Kg/year. Given the importance of vegetable oil in Egyptian cuisine, this low consumption figure strongly suggests that vegetable oil is often used well after its optimal life span (particularly in popular restaurants). Two thirds of oil is used for direct household and institutional consumption. The remainder is used to manufacture ghee. A portion of the vegetable oil consumption in Egypt is subsidized and distributed through a ration card system. Ration card holders are allowed only 0.50 Kg./person/month at a subsidized price of LE 0.50. In addition to that another 1.5 kg at LE 4.5 per kg is allowed. The average price for oil marketed by private producers ranges from LE 10/Kg. to LE 12/Kg. Because of its relatively low price, palm oil continues to maintain its competitive position with other imported oils for both human consumption and industrial use. Palm stearin is imported mainly as a substitute for tallow in soap manufacturing. TRADE Egypt continues to rely on imports to meet the bulk of its vegoil requirements. In 2009/2010, total Egyptian oil imports declined about 30 percent, mostly due to the world financial crisis. However, imports of edible oil are expected to increase from 615,000 MT in 2009/2010 to 650,000 MT in 2010/2011 as a result of the recovery of the global market, which was affected badly by the financial crisis. Imports of soybean oil and sunflower oil are forecast to increase in 20010/2011 by 2 percent and 7 percent respectively. Egypt?s imports of palm oil from Malaysia and Indonesia, for both direct consumption and industrial uses, decreased in 2009/2010 as a result of the world financial crisis. However, palm oil imports for 2010/2011 are forecast to increase by about 25 percent. The current average prices for imported palm oil are $830 per MT C&F compared to $850 per MT C&F in during 2009. Oilseed, Cottonseed 2008 E 2009 2010 gypt 2008/2009 2009/2010 2010/2011 Market Year Begin: Oct 2007 Market Year Begin: Oct 2008 Market Year Begin: Oct 2009 USDA Official Data New USDA Official Data New USDA Official New Post Post Data Post Data Data Data Area Planted (Cotton) 140 133 140 250 110 119 160 Area Harvested (Cotton) 130 133 130 117 110 119 160 Seed to Lint Ratio 6,800 6,800 6,800 6,800 6,800 6,800 6,800 Beginning Stocks 5 2 5 4 5 4 4 Production 152 180 152 140 150 136 174 MY Imports 0 0 0 0 0 0 0 MY Imp. from U.S. 0 0 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 0 0 Total Supply 157 182 157 144 155 140 178 MY Exports 0 0 0 0 0 0 0 MY Exp. To EU 0 0 0 0 0 0 0 Crush 150 173 150 138 148 132 174 Food Use Dom. Cons. 0 0 0 0 0 0 0 Feed Waste Dom. Cons. 3 4 3 3 3 4 4 Total Dom. Cons. 153 177 153 141 151 136 178 Meal, Cottonseed 2008 E 2009 2010 gypt 2008/2009 2009/2010 2010/2011 Market Year Begin: Oct 2007 Market Year Begin: Jun 2009 Market Year Begin: Oct 2009 USDA Official New USDA Official New USDA Official New Data Post Data Post Data Post Data Data Data Crush 150 173 150 138 148 132 174 Extr. Rate, 999.9999 0. 0. 0.4667 0. 0. 0.4545 0.4598 Beginning Stocks 0 0 0 0 0 0 0 Production 70 81 70 64 68 60 80 MY Imports 5 0 5 5 0 0 0 MY Imp. from U.S. 0 0 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 0 0 Total Supply 75 81 75 69 68 60 80 MY Exports 0 0 0 0 0 0 0 MY Exp. to EU 0 0 0 0 0 0 0 Industrial Dom. Cons. 0 0 0 0 0 0 0 Food Use Dom. Cons. 0 0 0 0 0 0 0 Feed Waste Dom. Cons. 75 81 75 69 68 60 80 Total Dom. Cons. 75 81 75 69 68 60 80 Ending Stocks 0 0 0 0 0 0 0 Total Distribution 75 81 75 69 68 60 80 Oil, Cottonseed 2008 E 2009 2010 gypt 2008/2009 2009/2010 2010/2011 Market Year Begin: Oct Market Year Begin: Jun Market Year Begin: Oct 2007 2009 2009 USDA Official New USDA Official New USDA Official New Data Post Data Post Data Post Data Data Data Crush 150 150 138 132 174 Extr. Rate, 999.9999 0. 0.16 0. 0.1591 0.1609 Beginning Stocks 0 0 0 0 0 Production 24 24 22 21 28 MY Imports 0 0 0 0 0 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 24 24 22 21 28 MY Exports 0 0 0 0 0 MY Exp. to EU 0 0 0 0 0 Industrial Dom. Cons. 5 5 4 3 3 Food Use Dom. Cons. 19 19 18 18 25 Feed Waste Dom. Cons. 0 0 0 0 0 Total Dom. Cons. 24 24 22 21 28 Ending Stocks 0 0 0 0 0 Total Distribution 24 24 22 21 28 Oilseed, Soybean 2008 E 2009 2010 gypt 2008/2009 2009/2010 2010/2011 Market Year Begin: Oct 2008 Market Year Begin: Oct 2009 Market Year Begin: Oct 2010 USDA Official Data New USDA Official Data New USDA Official New Post Post Data Post Data Data Data Area Planted 14 10 14 14 11 12 11 Area Harvested 13 10 13 13 11 12 11 Beginning Stocks 23 50 23 44 15 44 26 Production 32 27 32 32 29 27 25 MY Imports 1,575 1,020 1,575 1,500 1,025 1,623 1,650 MY Imp. from U.S. 1,097 870 1,097 800 800 1,131 1,150 MY Imp. from EU 0 0 0 0 0 0 0 Total Supply 1,630 1,097 1,630 1,576 1,069 1,694 1,701 MY Exports 0 0 0 0 0 0 0 MY Exp. to EU 0 0 0 0 0 0 0 Crush 1,545 1,055 1,545 1,480 1,007 1,635 1,644 Food Use Dom. Cons. 15 10 15 16 14 13 12 Feed Waste Dom. Cons. 26 17 26 28 23 20 20 Total Dom. Cons. 1,586 1,082 1,586 1,524 1,044 1,668 1,676 Ending Stocks 44 15 44 52 25 26 25 Total Distribution 1,630 1,097 1,630 1,576 1,069 1,694 1,701 Meal, Soybean 2008 E 2009 2010 gypt 2008/2009 2009/2010 2010/2011 Market Year Begin: Oct 2008 Market Year Begin: Oct 2009 Market Year Begin: Oct 2010 USDA Official Data New USDA Official Data New USDA Official New Post Post Data Post Data Data Data Crush 1,545 1,055 1,545 1,480 1,007 1,635 1,644 Extr. Rate, 999.9999 1. 1. 0.7961 1. 1. 0.7951 0.8029 Beginning Stocks 10 13 10 69 18 69 60 Production 1,230 800 1,230 1,180 802 1,300 1,320 MY Imports 279 250 279 250 245 250 230 MY Imp. from U.S. 99 90 99 75 80 92 95 MY Imp. from EU 0 0 0 0 0 0 0 Total Supply 1,519 1,063 1,519 1,499 1,065 1,619 1,610 MY Exports 0 0 0 0 0 0 0 MY Exp. to EU 0 0 0 0 0 0 0 Industrial Dom. Cons. 0 0 0 0 0 0 0 Food Use Dom. Cons. 0 0 0 0 0 0 0 Feed Waste Dom. Cons. 1,450 1,045 1,450 1,467 1,050 1,559 1,600 Total Dom. Cons. 1,450 1,045 1,450 1,467 1,050 1,559 1,600 Ending Stocks 69 18 69 32 15 60 10 Total Distribution 1,519 1,063 1,519 1,499 1,065 1,619 1,610 Oil, Soybean 2008 E 2009 2010 gypt 2008/2009 2009/2010 2010/2011 Market Year Begin: Oct 2008 Market Year Begin: Oct 2009 Market Year Begin: Oct 2010 USDA Official Data New USDA Official Data New USDA Official New Post Post Data Post Data Data Data Crush 1,545 1,055 1,545 1,480 1,007 1,635 1,644 Extr. Rate, 999.9999 0. 0. 0.178 0. 0. 0.1774 0.1776 Beginning Stocks 23 50 23 10 100 10 10 Production 275 190 275 265 181 290 292 MY Imports 320 590 320 350 600 245 250 MY Imp. from U.S. 0 19 0 0 20 13 15 MY Imp. from EU 0 0 0 0 0 0 0 Total Supply 618 830 618 625 881 545 552 MY Exports 3 0 3 3 0 0 0 MY Exp. to EU 0 0 0 0 0 0 0 Industrial Dom. Cons. 11 12 11 11 13 10 12 Food Use Dom. Cons. 594 718 594 601 778 525 530 Feed Waste Dom. Cons. 0 0 0 0 0 0 0 Total Dom. Cons. 605 730 605 612 791 535 542 Ending Stocks 10 100 10 10 90 10 10 Total Distribution 618 830 618 625 881 545 552 Oilseed, Sunflowerseed 2008 2009 2010 Egypt 2008/2009 2009/2010 2010/2011 Market Year Begin: Jun Market Year Begin: Jun Market Year Begin: Jun 2008 2009 2010 USDA Official New USDA Official New USDA Official New Data Post Data Post Data Post Data Data Data Area Planted 2 3 2 3 3 Area Harvested 3 2 3 2 2 Beginning Stocks 0 0 0 0 0 Production 5 5 5 5 5 MY Imports 0 0 0 0 0 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 5 5 5 5 5 MY Exports 0 0 0 0 0 MY Exp. to EU 0 0 0 0 0 Crush 5 5 5 5 5 Food Use Dom. Cons. 0 0 0 0 0 Feed Waste Dom. Cons. 0 0 0 0 0 Total Dom. Cons. 5 5 5 5 5 Ending Stocks 0 0 0 0 0 Total Distribution 5 5 5 5 5 Meal, Sunflowerseed 2008 E 2009 2010 gypt 2008/2009 2009/2010 2010/2011 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: Oct 2008 2009 2010 USDA Official New USDA Official New USDA Official New Data Post Data Post Data Post Data Data Data Crush 5 5 5 5 5 Extr. Rate, 999.9999 0. 0.4 0. 0.4 0.4 Beginning Stocks 0 0 0 0 0 Production 2 2 2 2 2 MY Imports 72 72 150 150 60 MY Imp. from U.S. 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 Total Supply 74 74 152 152 62 MY Exports 0 0 0 0 0 MY Exp. to EU 0 0 0 0 0 Industrial Dom. Cons. 0 0 0 0 0 Food Use Dom. Cons. 0 0 0 0 0 Feed Waste Dom. Cons. 74 74 152 152 62 Total Dom. Cons. 74 74 152 152 62 Ending Stocks 0 0 0 0 0 Total Distribution 74 74 152 152 62 Oil, Sunflowerseed 2008 E 2009 2010 gypt 2008/2009 2009/2010 2010/2011 Market Year Begin: Oct 2008 Market Year Begin: Oct 2009 Market Year Begin: Oct 2010 USDA Official New USDA Official New USDA Official New Data Post Data Post Data Post Data Data Data Crush 5 0 5 5 0 5 5 Extr. Rate, 999.9999 0. 0. 0.2 0. 0. 0.2 0.2 Beginning Stocks 0 0 0 17 0 17 5 Production 1 0 1 1 0 1 1 MY Imports 405 260 405 400 250 370 400 MY Imp. from U.S. 0 0 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 0 0 Total Supply 406 260 406 418 250 388 406 MY Exports 0 0 0 0 0 0 0 MY Exp. to EU 0 0 0 0 0 0 0 Industrial Dom. Cons. 0 0 0 0 0 0 0 Food Use Dom. Cons. 389 260 389 398 250 383 400 Feed Waste Dom. Cons. 0 0 0 0 0 0 0 Total Dom. Cons. 389 260 389 398 250 383 400 Ending Stocks 17 0 17 20 0 5 6 Total Distribution 406 260 406 418 250 388 406 Oil, Palm 2008 E 2009 2010 gypt 2008/2009 2009/2010 2010/2011 Market Year Begin: Oct Market Year Begin: Oct Market Year Begin: Oct 2008 2009 2010 USDA Official New USDA Official New USDA Official New Data Post Data Post Data Post Data Data Data Area Planted 0 0 0 0 0 0 0 Area Harvested 0 0 0 0 0 0 0 Trees 0 0 0 0 0 0 0 Beginning Stocks 0 0 0 200 0 200 100 Production 0 0 0 0 0 0 0 MY Imports 960 750 960 850 760 560 700 MY Imp. from U.S. 0 0 0 0 0 0 0 MY Imp. from EU 0 0 0 0 0 0 0 Total Supply 960 750 960 1,050 760 760 800 MY Exports 0 0 0 0 0 0 0 MY Exp. to EU 0 0 0 0 0 0 0 Industrial Dom. Cons. 140 160 140 175 165 150 150 Food Use Dom. Cons. 620 590 620 675 595 510 550 Feed Waste Dom. Cons. 0 0 0 0 0 0 0 Total Dom. Cons. 760 750 760 850 760 660 700 Ending Stocks 200 0 200 200 0 100 100 Total Distribution 960 750 960 1,050 760 760 800
Posted: 10 August 2010

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