By Basma Tharwat
El-Welely for Agriculture Crops, a subsidiary of El-Weley Group for Investment, achieved $10m in exports from the beginning of the year to the end of August.
Magdy El-Welely, CEO the group and member of the Agriculture Export Council, said food industry development begins with attention to agriculture and raising its ability to provide quality raw materials for the industrial sector.
He called for the state to pay attention to the issue of climate change and the significant rise in temperature and its impact on crops, especially summer crops.
The Ministry of Agriculture is expected to reconsider the timing of the cultivation of many agricultural crops, especially after many of them were damaged, added Magdy.
He also pointed to many of the obstacles facing investors, most notably the monetary policy of the Central Bank of Egypt (CBE) regarding the non-provision of the dollar in banks and limiting the maximum daily deposit to $10,000 per day and $50,000 per month. This is in addition to the bureaucratic crisis and the instability of the economic and political situation, said Magdy.
El-Welely said that government actions have halted EGP 75m in investments that the group intended to pump into projects in the fourth industrial zone in the Burj Al-Arab for the establishment of two projects. The first project is of EGP 50m in investments, to produce honey glucose from broken rice, and the second is for recycling waste resulting from milling rice with investments worth EGP 25m.
The production capacity of the company’s rice mills is 600,000 tonnes of barley rice a day, but the factories do not work more than 30% of the production capacity, since the decision to suspend the exporting of rice last year, added El-Welely.
He explained that the company’s exports have declined this year. Since the beginning of the year to August, the company’s total exports reached $10m, whereas last year they were worth $28m, setting an extremely difficult target to reach by the end of the year, said El-Welely.
He pointed out that the company was targeting $30m in exports by the end of the year, but political disorder in certain Arab countries, such as Syria, Libya and Iraq, have affected export, in addition to the low price of the euro, which has led to a decline in the value of exports.
The suspension of rice exports impacted the size of the company’s business, since it accounts for 70% of the company’s total exports, and it is also considered one of the most important factors that led to the decline in exports, due to the unfair conditions set by the Ministry of Industry and Foreign Trade in October last year, said El-Welely.
El-Welely welcomed opening the door for exporting rice once more in exchange for imposing an export levy of about EGP 2,000 per tonne, according to the Minister of Industry’s decision earlier this month.
“There are barriers to rice exporters represented in raising the price of Egyptian rice in the global markets, compared to some markets such as Italy, which is priced at €650 per tonne, and India at $350 per tonne, compared to the $750 per tonne for Egyptian rice, which weakens its competitiveness,” he continued.
El-Welely added that the rising temperatures during the year increased the percentage of broken rice by 35%, compared with a maximum of 10% during the past years, which will affect its quality and price by at least 60%.
He explained that due to the decline in exports during the last exporting season, the volume of exports did not exceed 33,000 tonnes which will make it difficult for exporters to open new markets throughout this season, especially after losing the most important export markets.
He pointed out that Syria and Libya acquired 400,000 tonnes of the total export of Egyptian rice, whereas Turkey acquired 600,000 tonnes, pointing to Turkey’s intention to import rice and barley and manufacture them locally.
The European Union countries depend on importing rice from countries such as Italy and Greece, given the customs exemptions applied in all EU countries.
He excluded the possibility of marketing large quantities of Egyptian rice through Arab countries such as Kuwait and Qatar, because of their preference for long-grain rice rather than short-grain Egyptian rice.
The volume of production of this season is 6.4m tonnes of barley rice for the production of 3.6m tonnes of white rice, along with the presence of stock from the previous season that amounts to up to 500,000 tonnes, while the volume of consumption is of no more than 3.5m tonnes.
The company is keen on participating in foreign exhibitions, where a large number of companies from different countries are gathered. For the 10th year in a row, El-Welely Group is participating in Anuga exhibition to promote the export of broken rice to several European countries, in addition to North African countries, such as Algeria and Morocco specifically. Broken rice is used in many food industries, such as baby formula, starch and glucose, said El-Welely.
He pointed to the necessity of paying attention to agriculture and achieving self-sufficiency in staple crops, rather than relying on imports. Egypt is import-dependent for various crops, such as wheat, corn, beans and chickpeas.
He also pointed to the importance of educating farmers not to use harmful pesticides or any other materials that may result in crop damage, as 40% of the production of white bean crop is damaged because some farmers use materials that speed up the rate of spoiling.