GRAIN IMPORTATIONS INTO EGYPT OVERALL SITUATION AND A VIEW OF LOGISTICS, QUALITY REQUIREMENTS AND RISKS

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1 GRAIN IMPORTATIONS INTO EGYPT OVERALL SITUATION AND A VIEW OF LOGISTICS, QUALITY REQUIREMENTS AND RISKS Sherif FAKHRY SGS Egypt, Agricultural Services Manager

2 EGYPT AND GRAINS Bread was the most important part of the ancient Egyptian diet. There was no rice, maize or potatoes at that time those commodities were only introduced into the country thousands of years later. The early Egyptians depended on wheat and barley to provide the carbohydrates they needed for a healthy, energetic lifestyle. 2

3 PRODUCTION AREAS IN EGYPT CLASSIFIED BY FAO Production in Egypt is assessed under irrigated conditions 3

4 PRODUCTION DATA OF WHEAT IN EGYPT Ministry of Agriculture experts declared that planted area in MY 2012/13 increased slightly compared to last year due to the increase of procurement prices offered to the farmers this year. According to the government official statistics, wheat production has increased significantly from 7.2 MMT in MY 2010/11 to about 8.4 MMT in MY 2011/12 due to favorable climatic conditions. Production for MY 2012/13 is estimated to be around MMT given the again favorable conditions for this year. However, many experts, traders, and consumers believe that this production figure may be overestimated. 4

5 PRODUCTION DATA OF CORN IN EGYPT Egypt s corn production is forecasted to reach 6.5 MMT in MY 2013/14, lower than the MY 2012/13 level of 7MMT. With the declining value of the Egyptian pound, corn prices are likely to increase, making the crop more attractive to farmers. However, yields and production will be restrained by the expected increase in fertilizer prices, as well potential shortages and high prices for pesticides. 5

6 PRODUCTION DATA OF RICE IN EGYPT Rice is Egypt s second most important export crop, after cotton. Total area harvested and production is to remain stable in MY2012/2013. The percent increase in paddy rice prices and a similar percentage increase in retailer prices will encourage farmers to maintain the same planted area in the upcoming season. Production of medium grain rice reached 6.7 MMT with 1.1 MMT for exportation. 6

7 SUMMARY GRAINS

8 GRAIN IMPORTS DURING 2013 GRAIN FORECAST OF IMPORTS DURING 2013/14 ORIGINS OF MAIN IMPORTS WHEAT 7.5 MMT Black Sea Eastern Europe USA France CORN 6.5 MMT Black Sea Eastern Europe USA RICE 0.34MMT India Pakistan Russia 8

9 MAIN IMPORTERS IN COUNTRY Wheat: Governmental sector (GASC) 60%. Private sector 40%. Corn: Private sector 100%. Rest of Grains: e.g Rice, Soybean, Barely. Total by private sector. 9

10 KEY PORTS AND TERMINALS 12 commercial ports. Among them, the most important grain handling ports are Alexandria which is the biggest port in Egypt; Dekheila Port is a natural extention to Alexandria Port and Abuqir east port. Damietta Port which has the largest container terminal and most sophisticated grain and container handling equipment in the Middle East. PortSaid and Suez at both ends of the Suez canal. Safaga on the Red-Sea. 10

11 TRANSPORTATION AND HANDLING OF GRAIN IMPORTS Majority of the grain handling is in Bulk Direct storage by conveyors to Silos Storage in flat warehouses Releases out of port 11

12 TRANSPORTATION AND HANDLING OF GRAIN IMPORTS Trucks Railway Barges 12

13 QUALITY, PROCEDURES AND DOCUMENTATION

14 QUALITY ISSUES Local crop issues in wheat and corn: Moisture can be high during the harvest and supply. Purity Possible admixtures and contamination. Imported wheat issues: Protein% Moisture% Ambrosia and Bug damage. Imported corn issues: Aflatoxin Broken% Ambrosia 14

15 PROCEDURE WHEN SHIPMENTS ARRIVE Presentation of documents by vessel s agent to the authorities to gain approvals to berth. Authorities (Ministry of Agriculture, ministry health and general authority of import and export + central lab. of feed, in case of Corn) board the vessel for sampling. Analysis of the cargo is performed for Quality, Health and Quarantine parameters. In case of approval, discharge is then performed with representative sampling by the Authorities. In cases of Rejection: Vessel is turned away or discharged under certain conditions depending on the issue. 15

16 MAIN DOCUMENTS REQUESTED AT TIME OF ARRIVAL Original BLs or LOI. Cargo Manifest. Cargo Plan. Certificate of Origin. Invoice. Importation approvals. Phytosanitary certificate. Original quality and quantity certificates. Fumigation certificates. 16

17 GENERAL CHALLENGES Farmers don t always supply all quantities for the produced wheat to the Government. Feeding to animals and local market consumption can occur. Insufficient storage facilities can result in loss and damage to the grain. Losses during discharges, transportations and logistics can occur. Decrease in the value of EGP in last 2 years makes importation very expensive. Instability and uncertain political conditions prevail. Quality problems are common. Subsidize or not? The common question for the farmers. 17

18 SGS ACTIVITIES IN EGYPT Paper study to ministry to inspect local crop and issue quality and quantity certificates. Working on Crop Quality Map. Closely work with farmer and NGOs to increase the awareness and field knowledge with new high technology processes being introduced into agriculture locally. Quality and quantity inspection at both ends to be sure of the specification and tonnages. SGS management of weighbridges in 4 Egyptian ports to control quantity with customs Risk Management and solutions: FOG and other guarantee services CMA and SMA 18

19 THANK YOU To contact us : 19

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