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Looking for a sweet deal

Egypt’s sugar producers say imported sugar is harming their businesses

Safeya Mounir , Friday 13 Sep 2019
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Views: 610

Looking for a sweet deal

The Egyptian Association of Sugarcane Producers are demanding that duties be imposed on imported sugar to level the playing field with local produce.

The price of imported sugar was much lower than locally produced sugar as a result of subsidies offered to farmers abroad, said Hammam Hussein, head of the association, in a request for duties to be imposed on foreign sugar.

A ton of imported sugar is sold for LE6,500, while a ton of locally produced sugar is LE9,000.
Hussein said imposing duties on imported sugar would protect the local industry, which employs some 30,000 people. The move would also protect farmers who are unable to sell their produce because of cheaper imported sugar.

He added that Egypt did not need to import sugar as the country’s production has increased thanks to increased sugar beet cultivation and better output per feddan. Egypt produced 1.25 million tons of sugar from sugarcane and 1.75 million tons from sugar beet this year, covering its consumption of around three million tons, he said.

The area cultivated with sugar beet this year exceeded 550,000 feddans, an increase of more than 100,000 feddans on last year, the Middle East News Agency (MENA) reported in July.

In 2018, Egypt produced 2.2 million tons of sugar, of which 1.3 million tons came from sugar beet.
Gamal Siam, a professor of agricultural economics at Cairo University, said locally produced sugar could not compete with sugar imported from Europe because the latter was subsidised.

Although Europe had begun reforming its subsidies on sugar, it nonetheless maintained restrictions on sugar imports and provided income support for farmers, he said.

In the meantime, sugar imported from Brazil, though not subsidised, was still cheaper than in Egypt because it was cultivated during the rainy season in Brazil, eliminating the cost of irrigation, Siam explained.

Should the government decide to impose import duties on sugar, it would not be the first time it has taken this path. In 2015, the Ministry of Trade and Industry issued a decree imposing temporary anti-dumping fees of 20 per cent, or a minimum of LE700, per ton of imported white sugar for a period not exceeding 200 days. The same temporary fees were imposed in 2009.

Hassan Al-Fendi, a member of the Chamber of Food Industries, rejected the imposition of anti-dumping duties, saying the free-trade regulations Egypt abides by oblige it to commit to the rules of competition. The fees would harm local sugar factories that refine sugar imported in its raw form, he added.

Islam Salem, managing director of Al-Canal Sugar, concurred with Al-Fendi. He said that countries exporting sugar to Egypt were not subsidising their produce and a large amount of the sugar imported was being refined in Egypt’s factories.

According to the Central Agency for Public Mobilisation and Statistics (CAPMAS), 43 per cent of the sugar imported into Egypt this year came from Brazil in raw form and was processed by the Sugar and Integrated Industries Company affiliated to the Ministry of Supply.

Forty-five per cent, or 52,300 tons, of imported refined sugar came from France, 50,000 tons from Brazil, and 8,000 tons from Belgium, it said.

The statistics also show that sugar imports are already down. According to the General Organisation for Export and Import Control, sugar imports fell by 10.2 per cent in the first half of the year to around 116,000 tons, down from around 123,000 tons during the same period last year.

“The local industry is not endangered by imports since the difference in the price of local and imported raw sugar is no more than LE200 per ton, or 50 piastres per kg,” Salem said.

The public sector produces 60 per cent of Egypt’s sugar, the majority of which is distributed through ration cards. Five public-sector companies affiliated to the Holding Company for Food Industries produce the larger portion of sugar in the country, foremost among them the Sugar and Integrated Industries Company and Delta Sugar, which specialises in producing fine-quality sugar and molasses from sugar beet.

The public sector owns four factories for producing sugar from sugar beet, the private sector three. In Upper Egypt, there are eight factories for producing sugar from sugarcane.

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