Sugar Annual

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

Last updated: 12 May 2011

While beet production is increasing, cane production continues to be relatively stable. Imports are forecast to continue growing, keeping pace with growth in demand driven by population growth.

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: 4/28/2011 GAIN Report Number: Egypt Sugar Annual Beet Farmers Responded Favorably on Price increase Approved By: Julio Maldonado Prepared By: Sherif I. Sherif Report Highlights: While beet production is increasing, cane production continues to be relatively stable. Imports are forecast to continue growing, keeping pace with growth in demand driven by population growth. Commodities: Select Production: Area Planted and Production Cane production and area are stable, with no expectations for change. With scarce land and water resources in Egypt, and limited cane crushing capacity, the government?s policy is to maintain a stable sugarcane area. Any future growth in sugar cane production would have to be through increased yields. Total cane area harvested in 2009/10 was estimated at 180,000 HA, unchanged from the previous year. However, the amount of cane crop actually delivered to crushers is estimated to come from only about 110,000 HA; the difference represents non-official deliveries utilized in manufacturing sugar cane syrup in small rural plants, or otherwise consumed fresh or not harvested due to infestation. Beet area is expanding, in 2010/11 area is estimated at 145,000 HA, compared to 98,000 HA in the previous year, and further increase is expected for 2011/12. Beet area and production are increasing as beet cultivation is one of the most lucrative winter crops, especially in newly reclaimed land. In addition, there was an increase in delivery price for beet from LE 320($53) in 2009/10 to LE 330($56) per MT in 20100/11. While beet production is growing and cane output is flat, cane production is still 53 percent of total sugar output. Cane is grown primarily in Upper Egypt; planted in January and harvested in mid-December. Cane processing is monopolized by one public sector Company, the Sugar and Integrated Industries Company (SIIC). The SIIC was formed in 1963 when the government nationalized the eight private sugar mills that were operating at that time. Most of these mills were built in the 1920's. The SIIC has limited crushing capacity and can process no more than 70-80 percent of the total available sugar cane crop. However, it does have a considerable amount of excess refining capacity. In order to generate new sources of revenue to compensate for its financial losses, the company contracts some of its excess refining capacity to private importers who process raw sugar at a fee of LE 430($73) per MT. A new sugar refinery plant with capacity of 600,000 MT per year is currently establishing by Cargill. Most beet production, on the other hand, is under the control of private sector companies, except for about 20,000 MT produced by the SIIC. Most production is located in the northern part of the Nile Delta, where the soil is quite poor and unsuitable for other crops, or in newly reclaimed desert land. Beets are planted in August-September and harvested in March. Yield and Crop Quality Weather does not play a major role in cane production in Egypt. The entire crop is irrigated and the climate is fairly consistent throughout the major production area of Upper Egypt. Low temperatures at night and mild temperatures during the day continue to keep the sugar content fairly stable. Preliminary reports on the 2011 crop indicate a sugar content of about 11.8 percent, compared to 11.7 percent for the 2010 crop. The sugar recovery rate in 2011 is unchanged from the previous year which was approximately 10.5 percent. The polarity of cane sugar is reported to be 99.6 percent. Weather conditions for the beet growing season in the Delta area have been favorable throughout most of the 2010/11 season. Yield is expected to average 20 MT/feddan (8.4 MT/HA), about same average as in 2009/10 seasons. The sugar recovery rate for this season is running at about 14.6 percent, compared to 14.5 percent in 2009/10 season. Fructose Corn Syrup The National Company for Maize Products (NCMP), a private sector company, is the only producer of high fructose corn syrup (HFCS) in Egypt. In 2010, production of HFCS was about 160,375 tons: 95,347 tons HFCS-55; and, the remainder is HFCS-42. This compared to 156,443 tons in 2009. NCMP also produces about 53,000 tons of starch. NCMP has storage capacity of up to 50,000 tons for corn and 6,000 tons for HFCS. The company produces approximately 800 kilograms of HFCS from one metric ton of corn. HFCS-55 is utilized exclusively by soft drink bottlers. HFCS-42 is used in a variety of products including jams and jellies, ice cream, pastries, and canned fruits. In addition to HFCS, NCMP produces crude corn oil, corn gluten meal (60 percent protein), which is used mainly in poultry feed, and corn gluten feed (16 percent protein), which is used mainly in cattle feed. The company imported 290,000 tons of yellow corn in 2010, all from the United States. In late March 2011, the average price for HFCS-55 was LE 2,350 per MT, compared with LE 2,165 per MT in 2009. The current import price for raw sugar (from Brazil) is $540 C&F per ton while the price for refined sugar is $640 C&F per ton. Consumption: Consumption and Prices Sugar consumption is driven by population growth. Sugar consumption is forecast to continue growing modestly. Per capita sugar consumption in Egypt is about 33 kg per year. In 2009, the GOE has increased the quantity of subsidized sugar distributed under the national ration system (45 million ration card holders), due to allowing the addition of new born to the ration cards after the ban for several years. As a result, under the current program, 900,000 tons of refined sugar is targeted for distribution under the ration system, compared to 450,000 MT was distributed in the past several years. The remainder of total consumption is freely traded on the open market. Trade: Trade For 2011, sugar imports, mostly raw sugar, are forecast to increase over 2010 levels. The expected increase in sugar imports in 2011 stems from the need to replenish stock and to meet the population- growth led increase in consumption. Of the 1,120,000 tons imported in 2010, only 120,000 tons were refined sugar (raw value). This represents a 14 percent increase from the import level of 2009. The current import price for white sugar is reported at $670/MT/CIF and for raw sugar is $550/MT/CIF. In 2010, Egypt exported 550,000 Mt mostly to Arab and African countries. This compared to 330,000 MT was exported in 2009. The current import tariff on white sugar and raw sugar are 10 and 2 percent respectively. In addition, as of February 2009, the government imposed an import fee of LE 500 per ton on white sugar as a protection for the inefficient domestic industry. Import Trade Matrix Import Trade Matrix Sugar Cane for Centrifugal Time Period 2009 Units: MT 2010 Imports for: 1 U.S. U.S. Others Others Brazil 883,000 Brazil 914,000 E.U 95,000 E.U 206,000 Total for Others Others not Listed Grand Total0 978,000 1,120,000 Stocks: Stocks Egypt normally maintains strategic sugar stocks at least equal to about 60 days of total consumption, or approximately 500,000 tons. In 2011, Egypt?s sugar stocks are expected to decrease at about 129,000 tons (raw sugar basis), mainly due to the increase in exports. Stocks are held mainly by the SIIC, or at storage facilities belonging to the Ministry of Welfare. Policy: Policy The sugarcane industry is labor intensive and is considered vital to the economy of Upper Egypt. The government has increased the delivery price for sugar cane to the SIIC for 2010/11 to LE 260($44) per MT compared to LE 240($43) per MT in 2009/10. This makes sugarcane profitable relative to competing crops; especially it stays in land for four or five ratouns. ($1=LE 5.9). In addition, the government provides soft loans to sugar cane farmers, which most cane farmers use. The current government policy also promotes expansion of sugar beet production, which is suitable to cultivation in newly reclaimed lands. The delivery price for sugar beet in MY 2010/11 has been set by the beet sugar companies at LE 320($54) per ton for sugar beet that has 16 percent sugar content, compared to LE 300($51) per MT in the previous year. Production, Supply and Demand Data Statistics: Sugar, Centrifugal E 2009/2010 2010/2011 2011/2012 gypt Market Year Begin: Market Year Begin: Market Year Begin: Jan 2009 Jan 2010 Jan 2011 USDA New USDA New USDA New Official Post Official Post Official Post Beginning Stocks 690 690 859 529 129 Beet Sugar 750 750 755 755 945 Production Cane Sugar 1,070 1,070 1,075 1,075 1,080 Production Total Sugar 1,820 1,820 1,830 1,830 2,025 Production Raw Imports 883 883 1,000 1,000 1,300 Refined Imp.(Raw 95 95 120 120 130 Val) Total Imports 978 978 1,120 1,120 1,430 Total Supply 3,488 3,488 3,809 3,479 3,584 Raw Exports 0 330 0 550 400 Refined Exp.(Raw 0 0 0 0 0 Val) Total Exports 0 330 0 550 400 Human Dom. 2,629 2,629 2,800 2,800 2,850 Consumption Other 0 0 0 0 0 Disappearance Total Use 2,629 2,629 2,800 2,800 2,850 Ending Stocks 859 529 1,009 129 334 Total Distribution 3,488 3,488 3,809 3,479 3,584 1000 MT Sugar Cane for Ce 2009/2010 2010/2011 2011/2012 ntrifugal Egypt Market Year Begin: Market Year Begin: Market Year Begin: Jan 2007 Jan 2008 Jan 2009 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 112 112 112 112 113 Area Harvested 111 111 111 111 112 Production 11,000 11,000 11,000 11,000 11,098 Total Supply 11,000 11,000 11,000 11,000 11,098 Utilization for Sugar 11,000 11,000 11,000 11,000 11,098 Utilized for Alcohol 0 0 0 0 0 Total Utilization 11,000 11,000 11,000 11,000 11,098 1000 HA, 1000 MT Sugar Beets E 2009/2010 2010/2011 2011/2012 gypt Market Year Begin: Market Year Begin: Market Year Begin: Jan 2009 Jan 2010 Jan 2011 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 98 145 147 Area Harvested 97 144 146 Production 3,700 5,470 5,545 Total Supply 3,700 5,470 5,545 Utilization for 3,700 5,470 5,545 Sugar Utilized for 0 0 0 Alcohol Total 3,700 5,470 5,545 Distribution 1000 HA, 1000 MT
Posted: 12 May 2011, last updated 12 May 2011

See more from Crops and Support Services in Egypt

Expert Views    
Egypt Rice Update   By Foreign Agricultural Service
Grain and Feed Annual   By Foreign Agricultural Service
Growth in U.S. Agriculture Exports   By Foreign Agricultural Service
Oilseeds and Products Annual   By Foreign Agricultural Service
Oilseeds and Products Annual in Egypt   By Foreign Agricultural Service