Agricultural export growth depends on infrastructure development in Egypt

 

A central component of Egypt’s plan to strengthen its agribusiness sector is the development of its supply chain infrastructure. The World Bank’s “Enabling the Business of Agriculture 2017” (EBA) report listed Egypt as one of the countries with the greatest room for improvement when it comes to commercial agriculture – particularly with regard to developing systems for effective storage and transportation of commodities.

International Interest

In February 2017 Tarek Kabil, minister of trade and industry, detailed plans for US-based Cargill to make a $150m investment in Egypt’s transportation and storage sector for agriculture, including $10m for grain-storage facilities in Daqahliyah Port that would increase storage capacity to 42,000 tonnes. Daqahliyah Port facilitates the storage and discharge of imported grains into Egypt, the world’s largest importer of wheat. Cargill has been operating in Egypt’s agriculture sector since 1994, particularly in providing poultry feed, and reported to local press that the company’s investments have already reached $200m. Local press reports from September 2017 indicated that other US companies may follow suit.

Machinery & Processing

Egyptian farms range from large, commercial businesses to small, family-owned plots, resulting in a wide range of mechanisation across the country. In the EBA report, Egypt fares better than nearby Jordan, ranking 26 out of 62 countries, when it comes to regulatory practices to govern the use of tractors, intended to measure the level of regulation on farm equipment. As modernisation efforts to improve crop yield continue, demand for more advanced machinery is likely to increase. In September 2017 Egypt discussed the possibility of launching joint projects in the production of trucks and agricultural machinery with a delegation from Belarus. Another noteworthy entrant into the space is Indian firm Mahindra Group, which also announced investments in the farm machinery sector with a production facility expected to be operational by the end of 2018.

Storage & Transport

A December 2016 paper by the International Food Policy Research Institute highlighted inefficiencies in Egypt’s storage and transport sector as a significant barrier to expanding agricultural exports, as it results in produce losses for perishable goods. Indeed, the UN Food and Agriculture Organisation estimates that across the MENA region, a lack of efficient storage can result in losses of up to 55% of fruits and vegetables, 22% of meats, 30% of fish and seafood, and 20% of dairy. To address this, in May 2017 the Ministry of Planning announced in local press its aim to double storage capacity for wheat from 1.5m tonnes in 2015/16 to 3.1m tonnes in 2017/18.

When it comes to transport, the World Bank noted in its EBA report that Egypt scores 61st out of 62 countries on transport, below all its neighbours in the region, indicating an overall lower logistics capacity. The European Bank for Reconstruction and Development is providing a $20m loan to help finance a project to address this. Egyptian company Medsofts, an agricultural importer and supply chain manager, is currently completing construction of a grain storage and handling terminal in the Port of Alexandria in cooperation with US food-processing corporation Archer Daniels Midland. The 50-50 joint venture will offer transportation and delivery services with an annual discharge capacity of over 2m tonnes, with land for expansion. In addition, as part of an ongoing $23m food security project, the US Agency for International Development is providing refrigerated trucks to support the cold transport of produce from farm to markets.

Continued investment in a smooth and efficient supply chain that links farmers to international markets will help the agricultural industry meet international export standards, something Egypt has struggled with in the past. “Across the country big farmers are increasingly resorting to using advanced technologies to meet export standards,” Moataz Selmy, managing director of Syngenta, a Swiss agribusiness firm, told OBG.

You have reached the limit of premium articles you can view for free. 

Choose from the options below to purchase print or digital editions of our Reports. You can also purchase a website subscription giving you unlimited access to all of our Reports online for 12 months.

If you have already purchased this Report or have a website subscription, please login to continue.

The Report: Egypt 2018

Agriculture chapter from The Report: Egypt 2018

Cover of The Report: Egypt 2018

The Report

This article is from the Agriculture chapter of The Report: Egypt 2018. Explore other chapters from this report.