Egypt to Buy More Soybean Seed
ALEXANDRIA - May 8/02 - STAT -- Egypt expects to increase soybean imports during the coming marketing year from around 345,000 metric tons (MT) to a potential 370,000 MT, according to a recent report by the U.S. agricultural attache here.
This is important growth in a country which does not normally import oilseeds and results from the recent construction of a privately held crushing plant here. The plant became fully operational last year and as it develops markets it is expected to import increased quantities of soybeans.
The United States has the biggest share of the market, supplying 221,000 MT during the 2001 calendar year. up from shipments of just 135,000 MT during the year 2000. Most of the remaining beans come from Argentina and Brazil.
Insofar as other oilseeds are concerned, Egypt does not import cottonseed because of worries about introducing boll weevil and other pests into Egyptian agriculture as well as concerns about mixing imported seed varieties with Egyptian cotton varieties. Sunflower seed imports in 2001-02 increased to 11,000 MT from zero the previous year. Imports in the coming season are expected to total 9,000 MT.
During 2001, demand for meal has been strong. Domestic beef and buffalo production is picking up due to the restriction imposed on imported frozen beef and live cattle because of BSE and FMD concerns. Moreover, poultry production was thought to be operating at a minimum of 80% capacity during most of the 2001, largely due to an increase in local meat prices.
However, after further weakening of the Egyptian Pound against the Dollar in December 2001, poultry operations are having to pay more for imported feed components such as corn and soybean meal. Reportedly some small poultry operations have gone out of business during the first quarter of this year, and others are being forced to shorten their operating cycle.
However, demand for soybean meal is being sustained by beef and milk operations. Most cottonseed meal production is utilized by the public sector feed mills for the production of livestock feed. Around 80% of soybean meal ends up in poultry rations, while small amounts of sunflower seed meal are used in dairy rations.
In 2001-02, total soybean meal consumption is estimated to increase to about 1.3 million MT, up from 1.1 million MT in 2000-01. Soybean meal consumption during 2002-03 is expected to remain about the same as this year due to anticipated increase in import costs.
Soybean meal continues to be the major meal imported into Egypt. In 2001, total soybean meal imports are estimated to be about 1 million MT, or about 17% higher than the 2000 level. In addition, Egypt imported 15,000 MT of sunflower meal and for the first time imported 56,000 MT of cottonseed meal last year. In 2001 Egypt imported 29,240 MT of cottonseed meal from Argentina, 17,318 MT from Turkey, 7,825 MT from the U.S and 1,700 MT from Australia.
In 2001, U.S. soybean meal exports to Egypt increased 73% taking 39% market share, while Argentina's market share dropped about 7% compared to the previous year. Soybean meal imports in 2002 are expected to decline slightly due to shortage in foreign exchange availability. Further decline is expected in 2003 due to the expected expansion of the crushing facility in Alexandria. It is worth noting some importers are looking to find alternative suppliers such as the United States in order to more secure supplies in light of the situation in Argentina.
The major oil produced in Egypt is cottonseed oil. Domestic production of cottonseed oil in 2001 increased to 66,000 MT from 47,000 MT in 2000 due to an increase in cotton production. Production in 2002 is expected to reach 67,000 MT.
Soybean oil production increased to 58,000 MT in 2001 from 35,000 MT in 2000 due to the increase in soybean imports. Production of soybean oil in 2002 is expected to increase to about 61,000 MT with the anticipated expansion in some of the existing plants.
In 2001, sunflower seed oil production increased to about 8,000 MT from 1,000 MT in 2000 as a result of increased sunflower seed imports (11,00 MT) for crushing in addition to the crushing of an additional 4,000 MT of locally produced sunflower seed by one of the public sector companies. However, in 2002, sunflower seed oil is expected to be less as a result of an expected decrease in cultivated areas.
Although there is no local production of palm oil, there are a number of private sector palm oil processors and distributors in Egypt. Essentially, all palm oil is delivered in refined form and requires minimal processing before being packaged for local sale. Most of the aforementioned companies concentrate on the production of ghee.
Total Egyptian refining capacity for vegetable seed oils and palm oil, is currently estimated at about 1.4 million MT, of which 672,000 MT is publicly owned and the remaining share is controlled by the private sector. So far, due to the continued decrease in oilseed availability, both public and private sector companies have been refining imported crude oils. However, as a result of Government Decree 469 issued December 31, 2001, which reduced tariffs on imported refined vegetable oil (in bulk) from 8% to 2%, crude oil imports are expected to decrease substantially in the future. Refiners are currently pressing the government to restore higher import tariffs on refined oil.
About 60% of the country's total edible oil supply is refined by FIHC and destined for human consumption. The remaining share is refined by the private sector. About two-thirds of all palm oil is used for household and institutional purposes, and the reminder is used for the production of ghee (shortening). Soybean oil consumption continues to be the leading consumer oil in Egypt.
Soybean oil, sunflower seed oil and cottonseed oil consumption increased from 40%, 8% and 9% in MY 2000 to 41%, 9% and 12% in 2001 respectively, while the consumption of palm oil decreased from 43% to 37%. Lower palm oil consumption was mainly due to the lack of foreign exchange liquidity especially for FIHC (major importer for palm oil). Although, consumption of palm oil decreased from 269,000 MT in 2000 to 211,000 MT in 2001, palm oil continues to maintain a good market share among other consumed oils, be it for human consumption or industrial use. Palm stearin is imported mainly as a substitute for tallow in soap manufacturing.
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