The agricultural crop sector faces a range of challenges which have affected performance over the past year, most notably involving a lack of coordination on exporters’ needs in foreign markets and a dearth of support for companies facing a number of issues, especially those pertaining to transport.
A group of exporters have developed a plan with solutions to revive agricultural exports and address the most important problems faced by the sector. The goal is to expand the sector’s ability to compete on new markets in the near future.
Member of the Agriculture Export Council Salah Hegazy said the plan for coordination must be established between exporters to avoid flooding foreign markets with excess supply and that this experience has been very successful in Europe.
He also stressed the importance of activating the role of the Export Council within the process of adjusting required quantities cultivated annually for export. Exporters are only familiar with a culture of competition amongst themselves. The Egyptian agricultural market received a high ranking for non-compliance to food quality and safety standards due to the lack of an organisation to supervise exporters.
The president approved the principal of creating a board for food safety that would work to enhance the quality of Egyptian exports and increase their volume.
A study conducted by the Netherlands on the extent of states’ adherence to export requirements globally found that Egypt does not meet more than 10% of such standards, while Morocco fulfills 50%.
Hegazy noted that exports fell by 20% by the end of last year as a result of an increase in the volume of crops supplied to the market, which reduced prices and that the impact of the depreciation of the euro against the dollar.
Exporters expected agricultural volumes to grow after EU countries boycotted Russia in 2015 but the shipping crisis and associated price increase in Egypt prevented them from realising these hopes.
High transportation costs form one of the biggest obstacles to Egyptian exports compared to Turkey and Iran. Despite a strong presence for several exporters in Russia in terms of quantity, the depreciation of the ruble against the pound reduced the value of exports, representing a fatal blow to the final crop of last season.
He predicted that exports would witness a revival in 2015 with exporters keen to strengthen their position in the global market after the losses they suffered last season.
President of Marco Group Mohamed Rostom said that Egypt lost several Arab export markets following the revolutions and turmoil that has plagued the region. Egypt was unable to open new markets due to delays in receiving government export support. This influenced Egypt’s agricultural exports last season.
Issues with naval transport caused many shipment delays and fines were imposed on exporters as a result.
The Central Bank of Egypt’s (CBE) recent policies impacted export and import companies since many firms import products from customers abroad for a specific value and export Egyptian products at a slightly higher value but CBE has rejected this type of transaction.
He called for the establishment of a precise plan to enter new markets, especially that of Africa, and that a trade representation office follow up to help market Egyptian products abroad.
Chairman of Nogoom Agricultural Crops Yassin Ahmed said the government must meet with the private sector regularly to discuss issues that impact export companies and develop a new system for supporting exports as soon as possible.
He stressed on the importance of paying attention to companies operating in Upper Egypt and that those are the firms that suffer most despite the fact that they are currently the best companies in the sector. These companies were ignored in the Ministry of Trade meetings with the Export Council while establishing the export support law or discussing any decisions relevant to the sector.