File Photo: Bags of sugar are stacked inside the government food outlet in Cairo, Egypt. (Photo: Reuters)
A ban on Egypt’s import of white and raw sugar will continue for an additional three months to give a chance for local companies to clear their stocks of sugar, Trade and Industry Minister Nevine Gamea announced on Tuesday.
Egypt's sugar reserves are estimated at 1.4 million tons of sugar, which is sufficient for consumption for more than six months, Gamea said, according to an official statement.
The decision, which will come into effect once published in the official gazette, excludes white sugar required for pharmaceutical industries. For raw sugar, only specific quantities approved by the ministries of trade and supply can be exempted from the import ban.
Gamea said the decision aims to protect local industry from the volatile changes in global sugar prices.
She referred to the drop in petroleum prices accompanied by a drop in sugar prices, especially raw sugar, causing imported sugar to become less expensive than that produced locally, which in return seriously harms local industry.
The link between the prices of sugar and oil is based on the fact that sugarcane can be processed to produce both sugar and ethanol, which is used as fuel.
The import ban was originally put in place last June due to a rise in sugar imports that led to the accumulation of sugar at local companies. Egypt consumes 3 to 3.2 million tons of sugar annually, including 2.4 million tons of locally-produced sugar, according to Supply Minister Ali Mosselhy.
Raw sugar is made up of light brown crystals that contain molasses, before it is refined, while white sugar undergoes more steps.
Due to the spread of coronavirus globally, including in Brazil, which is known for producing almost half of the world’s supply of sugar, the use of transportation dropped dramatically and therefore demand for fuel also dropped.
This caused farmers in Brazil to focus on the production of sugar rather than ethanol from sugarcane, causing a large increase in sugar production and exportation.