Egypt imports over 90 per cent of its needs of cooking oil
The government said this month that it plans to plant 250,000 feddans of soybean and 100,000 feddans of sunflowers this year to increase local production of cooking oil. The Minister of Supply said last week that the country is planning to n. Egypt imports 2.5 million tons of oil annually as it produces less than 10 per cent of its consumption of vegetable oil.
The main features of the plans were revealed following a cabinet meeting on 6 February, during which it was announced that the government would provide the necessary seeds for the expansion. On 9 February, President Abdel-Fattah Al-Sisi inaugurated the second phase of the Silo Foods Industries, a complex of food-manufacturing factories in Menoufiya, where the plans were also announced.
During the expansion phase, the Ministry of Agriculture and Land Reclamation will oversee the contractual arrangements between farmers, manufacturers, exporters, and intermediaries in the cooking oil market. The aim is to reach a fair price for the farmer that meets the quality and quantities needed for manufacturing and exporting.
The expansion of production of cooking oil is long overdue. In 2012, a study entitled “Agricultural Development in Egypt: History Lessons and Future Horizons” stressed the need to expand oil seeds cultivation in Egypt because their prices had risen following the global food crisis of 2008.
Going forward, this meant their prices would further increase with time, the study reported. It anticipated a recurrence of the 2008 food crisis and proposed that increasing manufacturing would save the state a hefty sum of the foreign currency it pays to import the staple.
The price of cooking oil has drastically increased since the 2008 crunch, and it continued to do so in 2022 because Russia and Ukraine are main contributors to oil-seed production, especially sunflowers, said Ashraf Kamal, a professor of agricultural economy at the Institute of Agricultural Research in Cairo and the author of the 2012 study.
Economic expert Rashad Abdou criticised the fact that Egypt imports about 90 per cent of its needs of cooking oil, telling Al-Ahram Weekly that cooking oil production does not require advanced technologies or complicated equipment.
Abdou said farmers have not been focusing on cultivating oil crops in recent decades due to the absence of a pricing mechanism. Kamal added that the absence of indicative quantities and the freedom farmers enjoy in choosing the crops they want to grow have contributed to the problem.
At the 6 February cabinet meeting, the government decided to introduce a pricing mechanism for oil seeds ahead of the planting season.
Kamal told the Weekly that the government should encourage farmers to grow soybean, sunflowers, and corn by setting a rewarding procurement price for the crops. The pricing mechanism should be flexible enough to accommodate global market-price fluctuations, he added.
Another factor that will contribute to the expansion of the land allocated to oil seeds is the intention to reduce the land planted with rice, which requires a large amount of water to grow, Kamal said.
If the country moves ahead with its plans, Egypt will be able to secure 30 per cent of its cooking oil needs by 2025, he added.
* A version of this article appears in print in the 16 February, 2023 edition of Al-Ahram Weekly