Egypt Independent: Business-Main news en Basic commodity reserves are secure, being bolstered: minister <img src="" alt="" title="" class="imagecache imagecache-media_thumbnail" width="152" height="114" /><p>The Ministry of Supply and Internal Trade is currently working to build up a six-month strategic reserve of basic commodities, Minister Mohamed Meselhy said in a press statement on Tuesday.<br /><br />The ministry is working with the National Service Projects Authority of the Armed Forces to boost reserves, he said, adding that the CBE has allocated US$1.8 billion to fund the project.<br /><br />According to Meselhy, there are currently enough sugar reserves to last four months. The ministry has ordered 450,000 tons of sugar, 134,000 tons of which will be available this week, he said.<br /><br />The oil reserves will last five months, said Meselhy, pointing out that 97 percent of Egypt&#39;s oil is imported.<br /><br />He said Egypt&#39;s wheat reserves will last for five months, while livestock will last until June 2017.</p><p>Meanwhile, frozen meat ordered from foreign countries such as Brazil will last for five months, and frozen poultry for 10 months, according to Meselhy.<br /><br />The minister said it was necessary to rationalize the consumption of subsidized goods in order to make the reserves go further.<br /><br /><em>Edited translation from Al-Masry Al-Youm</em></p> Tue, 25 Oct 2016 13:53:00 +0000 Al-Masry Al-Youm 2473777 at sites/default/files/photo/2016/02/19/503194/smartcards.jpeg Egypt industry races to fill void as trade gap to narrow $11-12 billion in 2016 <img src="" alt="" title="" class="imagecache imagecache-media_thumbnail" width="152" height="114" /><div>Egypt expects to cut its trade deficit by $11-$12 billion in 2016 as part of efforts to ease an acute dollar shortage and is encouraging domestic industries to fill the void as imports plummet, Trade and Industry Minister Tarek Kabil said.</div><div>&nbsp;</div><div>Speaking as part of the Reuters Middle East Investment Summit, Kabil said Egypt had produced about $4 billion worth of import substitutes since the start of the year and aimed to grow domestic industry by 8 percent in three years.</div><div>&nbsp;</div><div>&quot;If you look at last month&#39;s report, industry grew by almost 20 percent, because it has to fill the gap of the imports. Some of (the imports) are unnecessary and some is real consumption that Egyptian industry has to fill the gap for,&quot; he said in an interview at his wood-paneled offices in Cairo.</div><div>&nbsp;</div><div>He said local companies were producing substitutes primarily in food industries, but also building materials, chemicals, leather and furniture.</div><div>&nbsp;</div><div>Egypt has struggled to overcome a crippling dollar shortage since the 2011 uprising caused foreign investors and tourists, key earners of foreign exchange, to flee.</div><div>&nbsp;</div><div>The shortage is exacerbated by a severe trade imbalance - Egypt imported $67 billion worth of goods in 2015 but exported just $18.5 billion, according to trade ministry data.</div><div>&nbsp;</div><div>Central bank governor Tarek Amer said in January Egypt aimed to cut its import bill by 25 percent to ease dollar demand.</div><div>&nbsp;</div><div>Egypt has this year raised customs tariffs on luxury goods, plugged customs loopholes, and tightened quality controls.</div><div>&nbsp;</div><div>Together with dollar rationing and capital controls that have made it difficult for merchants to obtain enough foreign exchange to pay for cargoes, the measures have curbed imports.</div><div>&nbsp;</div><div>Prices of imported goods have soared as merchants are forced to source their dollars on the black market for as much as 15.5 pounds per dollar, a wide spread over the official rate of 8.8 pounds. Some imported goods have become scarce.</div><div>&nbsp;</div><div>Kabil said the trade deficit had narrowed by $8 billion in the first nine months of this year, with imports falling $7 billion but exports - key to bringing more dollars into the economy - rising by only $1 billion.</div><div>&nbsp;</div><div>But the moves have prompted complaints from manufacturers who say they struggle to import components and raw materials or pay more for them as they have to source dollars on the black market. The result: more expensive end products that are less competitive abroad.</div><div>&nbsp;</div><div><strong>Doubling exports</strong></div><div>&nbsp;</div><div>The minister, a former PepsiCo executive, said low labor costs would help keep manufacturers competitive as Egypt seeks to double its exports in the next five years.</div><div>&nbsp;</div><div>Egypt has created an export development agency to market Egyptian products abroad, Kabil said. It is focusing on Africa, where Egypt has a competitive as well as geographical advantage. The aim is to increase exports to Africa from $4 billion now to $8 billion five years, or 20 percent per year, he said.</div><div>&nbsp;</div><div>&quot;We have already opened a logistics center in Kenya ... last month,&quot; said Kabil. &quot;We have a direct shipping line now from Egypt to Kenya and we&#39;re expanding on that ... Kenya is a no-brainer because it has access to five immediate countries next to it.&quot;</div><div>&nbsp;</div><div>To boost manufacturing, Egypt has increased the amount of industrial land available and will offer 10 million square meters on 30-year-leases this year, he said.</div><div>&nbsp;</div><div>It has already offered about 5 million square meters and is working on fully integrated industrial parks dedicated to small manufacturers.</div><div>&nbsp;</div><div>&quot;We have been focusing on this because there is a severe shortage of industrial land,&quot; Kabil said. &quot;We are looking for exports to be 50 percent of imports within three years.&quot;</div><div>&nbsp;</div> Tue, 25 Oct 2016 09:09:00 +0000 Reuters 2473763 at sites/default/files/photo/2015/11/10/16030/image_0.jpg Egypt's Edita, maker of Twinkies, shuts sweet factory after sugar seized <img src="" alt="" title="" class="imagecache imagecache-media_thumbnail" width="152" height="114" /><div>Edita Food Industries, Egypt&#39;s maker of Twinkies, said on Monday its sweet factory in Beni Suef had been shut for three days after authorities seized its sugar, raising questions among investors over the way Egypt is handling a supply crunch.</div><div>&nbsp;</div><div>At supermarkets nationwide sugar has all but vanished, prompting media talk of a crisis and pushing the state to rapidly increase imports despite an acute dollar shortage and soaring global prices of the sweetener.</div><div>&nbsp;</div><div>The government has accused factories and traders of hoarding stocks to push up prices, an allegation they deny.</div><div>&nbsp;</div><div>One sugar supplier said raids on factories began last week and mark the latest escalation in confiscations which have hit thousands of wholesalers and packers in recent weeks.</div><div>&nbsp;</div><div>A supply ministry official told Reuters late on Sunday that 2,000 tonnes of sugar were confiscated after Edita was unable to show original invoices for sugar stocks held at Beni Suef.</div><div>&nbsp;</div><div>Edita, one of Egypt&#39;s largest food producers, told Reuters it had produced all required documents and denied hoarding.</div><div>&nbsp;</div><div>&quot;We provided all the original documents and invoices to the ministry for the sugar. The factory is now stopped because of the seizure of the sugar - 2,000 tonnes, which is three weeks of sugar for the company. This is a normal amount,&quot; said Menna Shams El Din, Investor Relations and Business Development Manager at Edita.</div><div>&nbsp;</div><div>&quot;There is no doubt this sugar was obtained on the private sector and not from subsidized sugar.&quot;</div><div>&nbsp;</div><div>Edita&#39;s shares plummeted 6.7 percent in early trade. It closed up 4.7 percent but at its lowest ever closing price of 7.95 Egyptian pounds.</div><div>&nbsp;</div><div>The company, which holds local ownership of brands including Twinkies, HoHos and Tiger Trail, said in a statement the closure was temporary and the plant would reopen once its sugar had been released.</div><div>&nbsp;</div><div>Edita has four factories in Egypt including its Beni Suef plant, which makes hard and soft candy. It said sweet production accounted for only 4 percent of its total revenues.</div><div>&nbsp;</div><div>Analysts said the closure would not have a major impact on Edita&#39;s profits but would send a negative signal to foreign investors, which Egypt needs to redress the dollar shortage at the heart of its sugar supply problems.</div><div>&nbsp;</div><div>Egypt consumes around 3 million tonnes of sugar annually but produces just over 2 million tonnes, with the gap filled by imports. But traders said high global sugar prices and a rising black market rate for dollars has made it too expensive and risky for many importers to obtain sugar in recent months.</div><div>&nbsp;</div><div>&quot;Getting sugar has really turned into a challenge,&quot; said an executive at one food producer, declining to be named.</div> Tue, 25 Oct 2016 08:28:00 +0000 Reuters 2473755 at sites/default/files/photo/2016/10/25/505446/edita-hq.jpg Egypt PM expects IMF deal to be signed within two months <img src="" alt="" title="" class="imagecache imagecache-media_thumbnail" width="152" height="114" /><div>Egypt hopes to receive final approval for its $12 billion International Monetary Fund lending program within two months, Prime Minister Sherif Ismail said in a television interview on Monday.</div><div>&nbsp;</div><div>Egypt received preliminary approval for the three-year deal aimed at plugging its budget deficit and balancing currency markets in August but the IMF&#39;s executive board still has to sign off.</div><div>&nbsp;</div><div>&quot;I imagine that within the coming two months and before the end of the year we will have signed the loan,&quot; the prime minister said in an interview with the Egyptian channel CBC.</div><div>&nbsp;</div> Tue, 25 Oct 2016 08:25:00 +0000 Reuters 2473754 at sites/default/files/photo/2015/12/30/94/prime_minister_sherif_ismail.jpg