5000 tons of white sugar offered on Egypt’s commodities exchange during first trading session

EGYPT – The Egyptian Mercantile Exchange (EME) has announced that 5 white sugar production companies offered 5,000 tons during the first trading session for white sugar following the listing of the product in the traded commodities.

Sugar has now transitioned to be one of the most important commodities in the Egyptian food basket system.

Chairman of the Egyptian Mercantile Exchange (EMX) Ibrahim Ashmawy explained that the number of 7 companies submitted purchase requests through the EMX platform, and implementation was completed for 6 companies with a total quantity of 4000 tons, at an average price of 24,300 Egyptian pounds per ton.

He stated that the offering came to control the markets and deal with global developments to ensure transparency in commercial transactions and in light of the assignments of the Supreme Investment Council to activate the mechanisms of the Mercantile Exchange.

“Trading sugar on the EME will improve pricing efficiency, which means that all parties in the market will have a clear reference for pricing,” Medhat Nafei, former advisor to the minister of supply and internal trade, told Ahram Online.

“Adding sugar to the commodities market will also improve transparency in the market. To make the best of this, the government should provide incentives and legislation to encourage trading more amounts of sugar on the EME.”

The EME was established in January 2020 via a partnership between the Egyptian Exchange, the Internal Trade Development Authority, and the General Authority For Supply Commodities.

Ashmawy pointed out that the Egyptian Commodity Exchange is an effective mechanism for linking producers with merchants and distributing directly without intermediaries.

This leads to a decrease in the cycles of commodity trading, increases the efficiency of the market, and allows for a price index to be based on commercial transactions.

The Egyptian government applied in March 2023 a three-month ban on all types of sugar exports as a precautionary measure to secure sufficient sugar for domestic consumption.

As of July, sugar prices surged by 38.4 percent compared to the same month last year, according to Egypt’s latest official inflation data.

“… trading on a secondary market like the EME will not solve the current shortage in the sugar in the market, which was resulted by prioritizing cultivating wheat over sugar beet, the main input in most of Egypt’s production of sugar,” Nafei warned.

He applauded the government for banning exports but urged it to consider more imports to control prices and stabilize the market.

A report by the Central Agency for Public Mobilization and Statistics shows that in 2022, Egypt’s production of sugar beet and sugarcane surged by 17.3 percent to more than 30 million tons, up from 25.062 million tons a year earlier.

According to the OECD-FAO Agricultural Outlook 2023-2032, Egypt is set to be the largest producer of sugar in Africa by 2032.

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