By Mohamed Abdel Monsef
Farmers are requesting a 12% price increase for supplying one tonne of beets to factories due to high production costs, according to Sugar Groups Council Chairman Abdelwahab Allam.
Allam said the price rise is also due to the subsidy offset of price increases for diesel fuel used in irrigation pumps at a rate of 60%. Fertiliser prices have increased by 33%, as the subsidy would have allowed farmers to maintain a profit margin in light of increased production costs.
Sugar cane factories will begin receiving sugar cane crops by the end of next month, and sugar beet crops by the end of January 2015.
Allam predicted that sugar production will increase this year to 2.5m tonnes, up from 2.3m tonnes last year. He also anticipates that Egypt’s sugar market will become 80% self-sufficient, as annual consumption is estimated at approximately 3m tonnes.
He added that 500,000 acres of sugar beets were cultivated this season, and that production is expected to reach 1.4m tonnes. As much as 285,000 acres of sugar cane were cultivated this season, with 1.1m tonnes of sugar expected.
Allam stressed that farmers prefer growing beets because it is a contractual crop: farmers enter into contractual relationships with factories to market their products before cultivation and profit margins range between EGP4,000-5,000.
He said that the cost of cultivation is EGP 4,500 per acre, of which an average of EGP2,000 goes to production supplies and EGP2,500 to rent. One acre will typically produce 20 tonnes at an average of EGP 400 per tonne.
Allam predicted that Egypt will move away from importing sugar and become an exporter in 10 years time, if 100,000 new acres are cultivated and new factories are constructed.
He said that the increase in the average yield per acre of beets ranges from 20 to 25 tonnes, and enhancing factories’ efficiency so that they operate at maximum production levels as well as reducing losses and per capita consumption from 34 to 32kg per year will allow Egypt to become self-sufficiency in supplying sugar to the domestic market.
Allam said that there are seven factories that produce sugar from beets in addition to eight subsidiaries of the Egyptian Sugar & Integrated Industries Co which produce sugar from sugar cane. Two new factories that will produce sugar from beets are currently under construction under UAE investments, he said, with one located in Sharqeya and another in the Suez Canal Axis. Studies are also being conducted on constructing other factories in Minya and land reclamation areas.
Delta Sugar Company Chairman Abdel Hamid Salama stressed the beet companies’ commitment to the supply prices contracted with farmers, explaining that there is no intention in raising this price.