Sugar cane farmers, government head-to-head again

CAIRO - 26 December 2017: A controversial issue between sugar cane farmers and the government has started to loom over prices of supplying sugar as some farmers are enduring losses after the flotation of the Egyptian pound.

Wages and salaries of workers and farmers in addition to the increasing prices of fertilizers after the flotation of the Egyptian pound in November, 2016, has made it difficult for owners of sugar cane farms to continue supplying sugar at LE 620/ton.

While there are recent moves on the official level to control the issue, as Head of the Agriculture Committee at the Parliament Hesham el-Sheaany submitted a report to the government to raise the price of supplying sugar cane and beetroot to factories, farmers are taking action from their side.

"Qena governorate, which is contributing the highest supply of sugar cane, took the frontline as farmers agreed not to supply sugar to factories if prices didn't go up to LE 800-1,000/ton," head of the sugar cane producers association in Qena Youssef Abdel Rady told Egypt Today.

"Farmers here submitted a complaint to the parliament to explain the process of sugar cane's cultivation and the volume of losses," Abdel Rady added.

"The parliament is waiting for a response from the ministries of Agriculture and Supply regarding the matter," MP Hesham el-Sheaany said, reassuring farmers that the government will set a faire purchasing price this year.

A year ago, the Egyptian government raised the price of purchasing sugar cane 25 percent from LE 400/ton to LE 500, after a sugar shortage issue plagued the country affected by a dollar currency crisis.

The issue was contained after the Ministry of Supply raided sugar and sugary products' factories in August 2016, seizing 250,000 tons of sugar.

This issue has pushed sugar prices to soar from LE 4.5 to LE 12 during the past few months. The government had to remove a tariff on raw sugar imports in March 2017, as traders’ complaints caused a sharp shortfall that triggered the price hike.

A month after, the ministry decided to impose a sugar export tariff worth LE 3,000 per ton.

In efforts to secure the supply of the strategic item, Egypt imported 350,000 tons of sugar, out of 850,000 contracted to be supplied until October, Minister of Supply Ali Moselhy said in August.

Sugar refining season starts in July and ends in October, while sugar production season begins in January.

Egypt produces around 2.4 million tons of sugar annually, while annual consumption averages 3.1 million tons. The gap is filled by private and public imports.