CAIRO: Minister of Trade and Industry Rachid Mohamed Rachid has removed temporary safeguard measures on imported sugar, according to a ministry press statement released Wednesday.
Rachid imposed the temporary protective tariff of LE 500 per ton on imported white and refined sugar in late January over and above an existing 10 percent duty on white sugar.
The temporary measure, which was to last for a maximum of one year, was introduced to help stabilize the price of sugar in the Egyptian market and did not apply to sugar used in the production of pharmaceuticals.
Al-Mal reported Wednesday that the ministry had received requests from Egyptian food industry representatives for removal of the tariff to help reduce production costs and enable competition on the export market.
Announcing the protective measures in January, Rachid said that there had been signs of sugar dumping in the Egyptian market.
“Removal of the tariffs benefits the food industry that depends mainly on large quantities of sugar. As the sugar prices are very high globally, regular interferences must be stopped to let the market mechanisms work on their own according to levels of supply and demand, Yousry Tinawy, general manager at the Chamber of Food Industries, told Daily News Egypt.
“Interference always causes problems and goes against the interests of consumers. The local sugar industry must evolve to be capable of competing, he continued.
Egyptians have one of the highest per capita consumption rates of sugar in the world at 34 kg per person a year, and the country suffers from a production gap of over 1 million tons of sugar annually, which must be bridged with imports.
This gap comes despite widespread production of sugarcane and sugar beet on 238,000 hectares in the Nile Delta.
Out of a total 2.2 million tons of sugar consumed annually, domestic producers provide about 1.4 million tons. About 60 percent of the remaining supply is imported from Brazil, with additional imports from sugar producers like France, Germany and Italy.
Al-Shorouk reported Thursday that Egyptian sugar production will not meet local needs for more than six months, and that the removal of safeguards will make importers less likely to import sugar, as the current world market price without tariffs is higher than prices of sugar in the local market.
“These were temporary duties imposed only to prevent drowning the market with refined imported sugar earlier this year, so the government had to impose duties in line with the request of local manufacturers to protect them, said Magdy Sobhy, an economic expert at Al-Ahram Center for Political and Strategic Studies.
“Now there’s no need to have these tariffs any more because imported refined sugar is very expensive so it holds no threat for the local manufacturers, he continued.
The Ministry of Trade and Industry has stated the intention to invest in the sugar production industry and encourage increased production of sugar beet to promote self-sufficiency in this vital commodity.
At the International Sugar Organization (ISO) conference in March, Egyptian officials put forward an investment plan for the industry of LE 200 million per year over three years towards the goal of reducing sugar imports by 60 percent come 2012. -Additional Reporting by Raghda El-Halawany.
