Increased demands for agricultural exports hurt domestic market

CAIRO – 19 February 2017: Increasing demand for Egyptian agricultural exports has negatively impacted the local consumption market, raising prices of various crops grown and consumed locally.

Egypt’s agricultural exports saw an increase in demand in the first quarter of the 2017 agricultural year, a few months after the flotation of the Egyptian Pound, according to the Central Agency for Public Mobilization and Statistics (CAMPAS).

The rise in foreign demand for Egyptian agricultural products had a negative impact on the local market, diverting many products from the local market in favor of exports.

Onions are one such vegetable that have been affected by the flotation. The price of one kilogram of onions has reached an unprecedented high, increasing from three to eight Egyptian Pounds since the flotation. This increase is due to onions being diverted for the export market, limiting local supply.


In November 2016, the Central Bank of Egypt (CBE) floated the local currency in an attempt to resolve a foreign currency crisis and draw international investments to the country after five years of political turmoil and economic crisis.

The central bank also increased interest rates by three percentage points to 14.75 percent.

After nearly four months, the U.S. dollar buying rate reached EGP 16, up from EGP 8.88 prior to the flotation. The devaluation has made Egyptian agricultural products cheaper and more attractive to foreign buyers.

Abdel Hamid al-Demerdash, head of Egypt's Agriculture Export Council, told Reuters that exports of Egyptian vegetables, fruits and legumes amounted to $2.2 billion last year. He added exports would likely rise by about 15 percent in 2017 as a result of the flotation.

Bassant Fahmy, a member of the Economic Committee in Parliament, said the flotation proved its usefulness in increasing agricultural exports. Her comments were made during an interview with On Live channel last week.

“China’s industry has invaded world markets after devaluating its currency’s value,” Fahmy told the channel.