Egyptian Sugar Company halts operations amidst cane supply challenges 

EGYPT – The Egyptian Sugar and Integrated Industries Company (ESIIC) has announced the suspension of operations at the New Abu Qurqas Sugar Factories, marking the end of its 155-year legacy.  

The decision, effective from January 15 to March 13, 2024, stems from insufficient contracted quantities of sugar cane, rendering the operation of costly equipment unfeasible. ESIIC has opted to redirect the contracted quantities to Girga Sugar Factories in Sohag Governorate. 

Farmers cite the low value of contracts, their misalignment with farming costs, and the soaring prices of sugar-related products as reasons for withholding sugar cane supply to ESIIC.  

The House of Representatives is set to address these concerns, as representatives submit briefing requests regarding the halt in operations and the absence of increased contracting prices. The discrepancy between current prices and farming costs will be a key point of the discussions. 

Mohamed Khalaf, Director General of Agricultural Affairs at Minya Agriculture Directorate, refutes claims of decreased cultivated areas or reduced sugar cane production in the south of Minya. 

However, farmers Bakr Fouad and Gamal Abdel Hakim attribute the failure to secure contracts with sugar factories to the unprofitable supply prices. They reveal that while the crop is sold to the private sector at US$ 6.46 per acre, supplying it to the factory earns them only US$3.23, resulting in substantial losses.  

The additional costs of harvesting, transportation, and factory processing further burden the farmers. 

ESIIC’s CEO and Managing Director, Essam al-Bedewy, disclosed that despite Minya Governorate producing 950,000 tons of sugar cane, the factory received a mere 90,000 tons in the previous year, resulting in losses of around US$9,040.  

Bedewy highlighted efforts to negotiate increased supply with farmers, but the quantity supplied dwindled to just 10,000 tons in 2023, sufficient for only five days of factory operation. Farmers are opting to sell to juice shops instead, where prices command a 40 percent markup compared to ESIIC, further exacerbates the challenges faced by the company. 

The broader context of Egypt’s ongoing sugar crisis, characterized by soaring market prices reaching EGP 50 (US$1.62) per kilogram, compounds the challenges faced by essential commodities. Despite government measures, including subsidies, initiatives to reduce prices, and temporary export bans, sugar prices remain significantly higher than the targeted EGP 27 (US$0.87) per kilogram.