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Monday, 26 October 2020

Egypt’s sophisticated market and booming population offer opportunities for Ireland’s dairy producers

In 2018, Ireland exported 23.5 million euros worth of dairy products to Egypt

Amina Khairy , Friday 14 Feb 2020
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McCarthy, McPhillips
As Egypt’s population hits 100 million, the demand for dairy products is on the rise. Milk, cheese, butter, yogurt: name it, and Egypt is producing or importing it to meet domestic needs. According to the numbers, Egypt is a sophisticated dairy market, with one of the highest dairy consumptions in Africa, at 98 litres per capita.
 
Last week, eight of Ireland’s leading dairy ingredient suppliers visited Cairo on an Irish government-led trade mission to uncover partnerships of mutual benefit.
 
Speaking to Ahram daily, Bord Bia’s (the Irish food board) CEO Tara McCarthy said the Irish government’s trade mission was “to build on Ireland’s reputation as a safe, trustworthy and sustainable supplier of dairy to Egypt.”
 
Bord Bia hosted the inaugural “Egypt Ireland Dairy Ingredients Forum in Cairo” with the aim of focusing on developing long-standing trade relationships between the Irish dairy industry and targeted Egyptian dairy processors and food manufacturers.
 
“What we are doing in this trade mission is laying the foundations of Ireland as a trusted partner to Egypt, one that can complement local industry and is poised to deliver upon Egypt’s increasing import needs,” McCarthy said.
 
She added that the population in Ireland is quite small -- around five million -- and that they produce enough food to feed a multiple of that number.
 
Assistant Secretary-General for the Department of Agriculture Food and Marine Sinead McPhillips told Ahram that Ireland and Egypt have a long history of trading, but in recent times, it has decreased. In the seventies and eighties, Ireland exported livestock and cattle to Egypt.
 
She added that the mission’s visit to Cairo was to build awareness of Ireland as a supplier of high-quality dairy produce, to better understand the Egyptian market, manufacturers and consumer needs, and to have face-to-face meetings with partners in Egypt.
 
“A total of 150 meetings were held in addition to dairy factory visits, not to sign contracts but to get to know business partners,” she added.
 
“Ireland and Egypt are two countries that are different in many ways, but we share an understanding the security of supply is key to allowing us to plan ahead for growth and success,” she said. The trade mission can complement Egypt’s local industry, she added.
 
McCarthy said that the export of dairy products to Egypt does not stand in contradiction with the export of livestock to Egypt, which would help to further increase Egypt’s production of dairy products. She explained that Ireland’s production of dairy products as well as livestock is expanding, and there is plenty of scope for both.
 
Regarding challenges facing trade relations in the Middle East, where instability is still an issue, McCarthy explained that “it’s about understanding the market, and meeting people in the streets. There are challenges everywhere around the glove, as well as opportunities. It’s all about studying the market and understanding it. When you gamble in a market, you can win or lose. But when you enter a market based on knowledge and research, it’s different.”
 
Challenges are part and parcel of any business-related issues, and while the UK is Ireland’s biggest market, some experts expect that Brexit will affect trade relations.
 
However, both McCarthy and McPhillips deny any negative effects, only changes.
 
“The UK and Ireland are neighbours, we share similar tastes and historical trade relations. And with the significant growth in our dairy production, UK remains to be our main market. However, it will be a bit more complex,” said McPhillips.
 
The complexity of animal health and diseases such as BSE add to challenges in the field of livestock and dairy trade. However, McCarthy asserts that Ireland has a very good record in animal health and that it has been free of BSE for a number of years, due to Ireland’s high standards of tracing and enforcing procedures maintaining animal health, in addition to applying strict controls in airports and ports, as animal diseases exist in many parts of the world.
 
McPhillips pointed out that that when it comes to virus control, such as the current coronavirus, the control is different. Consumers are educated to postpone unnecessary travel. However, from a market perspective, obviously markets consume less during periods of viruses’ outbreak for a number of months.
 
The popularity of new diets such as the keto diet, which heavily relies in its nutrition on proteins and dairy, did not really boost Ireland’s dairy business deals.
However, McCarthy believes that special diets are always regarded as a challenge as well as an opportunity.
 
“Part of our duty is to educate consumers on the nutritional values and facts of food, and to ensure that they have a balanced diet of natural food, in addition to enjoying their food, because it’s all about the taste. We track the trends on different diets. Some of them remain, but others are just fads. Consumers get bored, and start looking for new diets, but that doesn’t change our responsibly to keep informing people of the value of our food products, its sources and nutritional value,” she explained.
 
Ireland’s major dairy export markets are, in order, the UK, the Netherlands, China, the United States and Germany.
It is worth mentioning that Egypt has witnessed a 47 percent growth in total dairy imports over the past ten years. For dairy ingredients this includes 500 percent growth in Fat Filled Milk Powder (FFMP) to 12,000 tons and 230 percent growth in infant formula to 51,000 tones. Total dairy imports are expected to reach 230,000 metric tons by 2024.
 
In 2018, Ireland exported 23.5 million euros worth of dairy products to Egypt, with cheese accounting for half of these exports. Combined, butter and skimmed milk powder account for 32 percent of Irish dairy exports to Egypt.
 
Egypt’s self-sufficiency in dairy products ranges between 70 and 75 percent. However, the rapid rate of population increase means that Egypt is expected to need more dairy imports.

 
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