Abstract
The latest Egypt Agribusiness Report is published as the global recession
continues to strangle economic
fundamentals. However, analysts are growing
increasingly optimistic that the contractions witnessed in
many markets
are bottoming out, leading to the prospect of improved dynamics through the
remainder of
2009 and into 2010. In Egypt, agricultural initiatives aimed
at improving self-sufficiency have begun to
reap rewards, yet there
remains room for much improvement.
The Egyptian agribusiness sector faces
mounting challenges. In addition to the population expanding
faster than
any in the Arab world, the lack of domestically available water continues to
undermine many
attempts to increase productivity. Water usage per capita
is 800 cubic metres, some way below the
recognised water poverty line of
1,000 cubic metres. This means that agricultural producers face an uphill
task in husbandry, as household water consumption increasingly competes with
the needs of crops and
livestock.
So as to encourage a greater level
of agricultural production, the government has made significant efforts
to
improve productivity. The selling of state-owned enterprises, have helped
prick private sentiment.
Foreign direct investment flows have been liquid,
although it should be noted that a large proportion of
such capital is
leveraged through firms with interests in sectors, such as tourism, which have
suffered
markedly during the financial crisis.
Meanwhile, graduates
have been encouraged to get into husbandry with low interest loans and
free
animals to start them off; this has fuelled a marked upswing in those
wanting to work rurally, particularly
so considering the congestion of the
major cities and diminishing employment potential. The
disbursement of
modern technology has helped the cultivation of a variety of fruits and
vegetables to such
a degree that exports to neighbouring countries are
possible.
Among the main crops produced domestically, sugar is expected to
post the strongest growth through to
2013, as planted area increases and
as attempts to reduce the substantial import bill are implemented. Beet
in
particular will fuel the growth as a less moisture dependent crop than cane,
thus less of a drain on water
and irrigation. Egyptians are among the
highest per capita sugar consumers in the world and while
improving
supply-side fundamentals are of course paramount, curbing such excessively
high
consumption could accelerate a move towards greater
self-sufficiency.
Notwithstanding the large deficit, the 15.83% growth in
sugar output remains the highlight of the current
outlook, as the gains
made in production through other goods are generally quite modest.
Double-digit
growth is not expected for any other crop throughout the
five-year forecasting period. Consumption
growth is forecast slightly more
favourable dynamics, with beef, rice and milk consumption expanding by
18.26%, 27.96% and 17.32% respectively, as population growth and higher
incomes stimulate demand.
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