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Palm Oil Performance During COVID-19 In Egypt

The Egyptian government has started to adopt a coexistence strategy in the long-term to support precautionary measures while resuming services, businesses and economic activities. Egypt will resume international flights at all airports starting from July 1 amid preparations to resume foreign tourism in three provinces with the least infections.

Egypt, the most populous Arab country has already started steady reopening of services and offices, and recently allowed over 230 hotels to operate for local tourists with 50-percent capacity after they were given hygiene safety certificates. Hotels were badly hit due to the complete lock down which took place 3 month ago, restaurants faced some instabilities as consumer demand for fast food and ready-made meals was also affected by the long stay at home. Most of the people shifted to cooking at home. Therefore, eliminating those obstacles might support the HORECA sector. In addition, reopening of country’s border will resume export of food products to neighboring countries across borders. This will arouse the demand for palm oil in the HORECA sector and food industries.

The demand on palm oil is still there, In Jan-May, total imports of RBD palm oil, RBD palm olein and RBD palm stearin slumped by 14% (-67,066 MT) to record 402,583 MT as compared to 469,649 MT recorded in the same period last year. The decline in imports in the month of May to record 40,000 MT only is mainly attributed to high stocks carried forward from earlier months. Palm oil imports to Egypt represents 49% of the total oils & fats, this is mainly due to its competitive price versus other soft oils. As of 21 May, palm olein traded at $632 a MT, sunflower oil at $917 a MT and soybean oil at $758 a MT. According to industry sources, palm oil imports in June may reach 115,000 MT. That’s means total imports of palm oil in Jan-June this year will reach 500,000 MT, same as Jan-June 2019.

Malaysian palm oil export to Egypt is witnessing significant increase in Jan-June 2020. Egypt is now the top importer in West of Suez region, accounting for 36% of the total export of the region. Exports to Egypt doubled to record 74,559 MT compared to 37,110 MT same period last year.

Ministry of Supply and Internal Trade is securing availability of all food commodities at local markets, this is largely attained through importation. The government is looking to increase the country’s strategic commodity reserves enough for a six-month period to protect against possible food supply shortages, Egypt now has at least three months’ worth of staple goods in reserve. In Jan-May, the government increased the edible oil imports by 77% to record 319,000 MT compared to 180,000 MT same period last year. This has resulted to sharp increase in soft oils imports to the country jumping from 276,000 MT in Jan-May 2019 to reach 431,000 MT.

Product Jan-May Jan-May
  2020 2019
Crude Palm Oil –   –  
RBD palm oil 229,524 232,032
RBD palm olein 152,567 202,239
RBD palm stearin 20,492 35,378
RBD palm kernel 7,290 8,000
PFAD & oleochemical 1,010 1,499
Total palm oil derivatives 410,883 479,148
Cotton seed oil –   –  
Soybean oil 192,163 97,775
Sunflower oil 232,016 150,716
Corn oil 6,959 27,713
Total Soft oils 431,138 276,204
Crude coconut oil   (Laurics) 1,675 1,500
Total vegetable oil import 843,696 756,852

However, the situation in Egypt is still unstable especially with the large increase of infected cases every day. If the number increased to higher levels than expected, the government might hold back its plans to reopen again. This may also hit consumption of oils and fats in the food industries and might primarily affect demand on palm oil.

Prepared by Mohd. Suhaili Hambali

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