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High cost of importing, global price hikes are reason behind sugar shortage: ECA - Daily News Egypt

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High cost of importing, global price hikes are reason behind sugar shortage: ECA

The Egyptian Competition Authority conducted a market study to examine the reasons behind the scarcity of sugar in the market


The Egyptian Competition Authority (ECA) conducted a market study to examine the reasons behind the scarcity of sugar in the market.

The study showed claimed that there is no monopoly in the market, and sugar is mainly produced through two sources: sugar cane and beet. The Egyptian Sugar and Integrated Industries Company (ESIIC) uses sugar cane for producing its entire output of sugar, along with seven companies producing sugar from beet.

In the fiscal year of 2015/2016, sugar production amounted to 2.4m tonnes, enough to fulfill 77% of the national consumption. The gap of 700,000 tonnes is bridged through imports.

The study attributed the shortage to a number of factors, including the rising cost for importing operations, driven by US dollar scarcity and a high exchange rate. Other reasons mentioned in the study included the Central Bank of Egypt (CBE) amending the terms for granting letters of credit to importers, where traders have to pay for the purchases at once. The global hike in the price of sugar also attributed to the shortage.

Furthermore, the government buys the local production of sugar from its affiliate companies, which is roughly 77% of domestic production, for subsidies and consumer complexes. This was exploited by storekeepers, and contractors of transport, and grocers to store sugar and sell it at a higher price.

Topics: sugar
https://cdn1.dailynewsegypt.com/2016/11/03/high-cost-importing-global-price-hikes-reason-behind-sugar-shortage-eca/
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