The Businesspersons Association for Investment and Manufacturing has demanded the government to raise the price of sugarcane supply by EGP 300 to reach EGP 1,200 per tonne, to match expenses due to increases in diesel prices, which has sharply increased recently.
The association said in a statement on Tuesday that farmers use diesel machines in cultivating and irrigating their crops, whereby they will bear heavy losses.
Kamal Selim, a member of the association and chairperson of its import and export committee, said that the increase in diesel fuel prices exposed cane growers to heavy losses.
Selim called on the government to increase the supply of sugar cane to EGP 1,200 per tonne, pointing out that the sugar cane crop is a strategic crop, which is used in about 20 products in Egypt.
He pointed out that tens of thousands of feddans of sugar cane plantations rely on diesel machines to irrigate these crops.
He noted that the irrigation per feddan of sugar cane was at cost of EGP 150, while the crop needs four irrigations per month at a cost of EGP 600. After the increase in fuel prices, the cost of only one irrigation increased by EGP 70 to EGP 220, equal to four irrigations per month is EGP 280 per month, which is at the official price. He added that the desert agricultural lands need more water, which is considered a stumbling block for farmers.
“The increase in the prices of diesel will negatively affect the transfer of the crop from farmland to the plant, as well as the costs of transporting fertiliser and diesel to the farms and the transport of workers, which is also reflected in a low productivity of sugar cane. It is certain that it will be followed by an increase in the same proportions in fertiliser cost, and this might prompt farmers to stop the cultivation of sugar cane, and this works on the imbalance of the trade balance of the Egyptian economy, where sugar cane is a strategic crop,” explained Selim.
He elaborated that before fuel price hikes, there was a huge gap exceeding 1.2m tonnes between consumption and production.
Upper Egypt produces about 2.8m tonnes of sugar and consumption is about 4m tonnes annually, which drives the government to import all its sugar needs with hard currency, which drains foreign exchange reserves.
In January, President Abdel Fattah Al-Sisi instructed the government to increase the prices of sugarcane supply to factories to produce sugar by EGP 20 to reach EGP 720 for each tonne.