Food Export Council plans to raise exports beyond $3bn this year
INTENSIFYING PROMOTIONAL MISSIONS IN AFRICA, MERCOSUR COUNTRIES, SAYS BERZI
The Food Export Council (FEC) aims to increase the sector’s exports during the current year by 10%, up from the 3% increase realised last year.
Chairperson of the council, Hani Berzi, said the FEC aims to boost exports beyond $3bn this year, compared to $2.782bn last year and $2.706bn in 2016.
He pointed out that the rate of increase in the value of exports during the last year was weak, driven by the challenges faced by factories, after rising production costs due to the economic reform measures implemented by the government during the past two years.
“Although the liberalisation of exchange rates raised the capacity of the Egyptian food industry in foreign markets, it also led to increased costs of production locally, and forced some factories to reduce their production capacity,” he explained.
Berzi noted that most of the food industry’s products are dependent on imported production inputs, so the devaluation of the pound has had a significant impact on the cost.
He pointed out that the relative stability in economic conditions, with the stability of exchange rates at banks, supports the ability of companies to implement investment plans that had been disrupted last year.
This supports the gradual increase of production capacity in factories, which is one of the most important factors to reduce production costs, which supports competitiveness at the time of export.
Berzi said that the sector seeks to achieve a satisfactory performance for food companies, as there are still many opportunities to increase exports in the coming years.
He pointed out that the increase in exports will come through African markets and Mercosur countries, as well as expanding with customers in existing markets.
He added that the key focus is on non-Arab African markets, where exports reached $322m last year, accounting for 80% of exports to Africa.
Berzi pointed to the difficulty of determining specific growth rates in the continent’s markets during the current period. “They are constantly changing. And Egyptian companies have not yet identified the needs of all markets,” he said.
Moreover, he added that the focus on African markets is to compensate for the decline in exports to Arab markets during the past year, as a result of the cessation of importing of some countries and the decline of exports to others, due to events in the region, like Libya, Syria, Iraq, and Yemen.
He pointed out that the improvement in the political situation between Egypt and Sudan will eventually improve economic conditions, and there is an opportunity for the return of exports to it again, especially as it reaches about $330m per year on average.
In terms of Mercosur markets, he said that the council is in contact with Egyptian companies in this regard to identify the opportunities available in the markets of the countries of the convention, especially as they will benefit from customs exemptions under the convention.
The agreement includes Egypt, Brazil, Uruguay, Paraguay, and Argentina and entered into force in September last year.
Berzi said that these markets will be difficult in the beginning, because of the distance and absence of fast, direct shipping lines, though will be suitable for refrigerated products.
THE RATE OF INCREASE IN THE VALUE OF EXPORTS LAST YEAR WAS WEAK