INTRODUCTION

The market dynamics in Egypt play a pivotal role in the regional and global economy, driven by its significant consumer base, strategic geographic location connecting key regions, rich cultural heritage, and proactive economic reforms. Egypt’s reliance on imports has been impacted by recent geopolitical tensions in the region, with disruptions in the Red Sea affecting trade routes and leading to shifts in global shipping patterns. The consequences of these events have reverberated through various sectors, challenges in importation logistics, and supply chain disruptions.

The recent escalation in security threats following the attacks in the Red Sea by the Houthis militia has disrupted international trade flow, particularly impacting the Suez Canal’s operations. The resultant diversion of shipping routes has led to delays, increased shipping costs, and a reduction in freight tonnage passing through the canal. Subsequently, Egypt’s revenues from the Suez Canal have experienced a significant decline, affecting the country’s foreign currency earnings and global trade connectivity.

To ensure a sustainable and robust oils and fats sector in Egypt, stakeholders will need to closely monitor geopolitical developments, adapt supply chain strategies, and explore opportunities for collaboration. The evolving landscape underscores the importance of resilience, agility, and proactive risk management in navigating the complexities of the global market, ensuring continued growth and stability in the oils and fats industry in Egypt in the coming year.

PERFORMANCE OF MALAYSIAN PALM OIL EXPORTS TO EGYPT IN 2023

An insightful survey of Malaysian palm oil (MPO) exports to Egypt during 2023 compared to the previous year reveals changing trends in market performance. While a direct comparison between 2023 and 2022 indicates a decline in exports by 13%, amounting to a reduction of 55,015 MT, a deeper assessment suggests a more resilient position for MPO within the Egyptian market landscape. Notably, when evaluating MPO’s market share within Egypt’s imports through Adabeya port, the data unveils a relatively steady position, with MPO share standing at 21.2% in 2023 (249,945 MT) compared to 22.4% in 2022 (256,847 MT). It is noteworthy to highlight that a significant portion of palm oil imports in Egypt are facilitated through tanker ships rather than containers, emphasizing the enduring presence and competitive stance of MPO in the market.

 

EXPORT OF MALAYSIAN PALM OIL PRODUCTS

Product	2019	2020	2021	2022	2023
Palm Oil	84,950	155,747	219,719	350,178	279,841
Finished Products	9,882	11,682	14,861	14,538	14,580
Palm-Based Oleo	47,246	36,365	34,800	30,901	35,014
Palm Kernel Oil	28,601	37,059	36,685	23,714	34,882
Palm Kernel Cake	1,000	–	408	–	–
Total	171,678	240,853	306,474	419,332	364,316

Source: MPOB statistics  

Examining the export trends over the years provides valuable insights into the dynamic nature of the Malaysian palm oil sector’s performance in Egypt. Total exports have witnessed a notable upward trend, which increased from 171,678 MT in 2019 to 364,316 MT in 2023. Within this context, palm oil emerges as a predominant export commodity, consistently maintaining a substantial share of the total exports. The robust demand for palm oil is underscored by its consistent presence, with quantities peaking at 350,178 MT in 2022 before slightly decreasing to 279,841 MT in 2023. This trend signifies a consistent preference for Malaysian palm oil in the Egyptian market.

Furthermore, the analysis unveils fluctuations in the export quantities of MPO products such as finished products and oleochemicals, indicating potential shifts in market dynamics or demand patterns. Notably, palm kernel cake displays intermittent export volumes across various years, with a sporadic presence between 2019 and 2021, and an absence in 2020, 2022, and 2023. Such fluctuations may suggest varying levels of market supply stability, potentially influenced by production dynamics or market conditions.

In addition, the evolving trends in Malaysian palm oil exports to Egypt underscore the resilience and adaptability of the palm oil industry amidst changing market dynamics. The consistent demand for palm oil reflects the sector’s ability to navigate challenges and maintain a competitive edge in the Egyptian market.

 

CONTRIBUTING FACTORS TO MALAYSIAN PALM OIL EXPORT PERFORMANCE TO EGYPT IN 2023

MPO vs IPO imports performance in Egypt

Source: Local trade and data statistics

There is a shift in MPO market share in Egypt, from 1.6% in 2020 to 21.2% in 2023, highlighting a substantial tremendous growth. For years, Indonesian palm oil had been the dominant share in the Egyptian market. However, recent trends indicate a resurgence of Malaysian palm oil’s prominence. This resurgence can be attributed primarily to Pacific Interlink (PIL) expanded operations in Malaysia. As the primary shipper of palm oil to Egypt, commanding a market share of 65% of total imports in 2023, PIL facilitated around 85% of MPO imports to Egypt during 2023.

 

COMPARATIVE ANALYSIS OF PALM OIL PERFORMANCE AMONG DIFFERENT TYPES OF OILS

Source: Local trade and data statistics

Palm oil has maintained a stable position in comparison to other oils and fats over the last four years, demonstrating resilience even as imports of soybean oil and sunflower oil exhibited fluctuations during this period. Notably, palm oil imports have shown remarkable consistency since 2020, establishing it as a reliable and steadfast component of the oils and fats market.

CONCLUSION

Despite facing economic challenges and geographical threats due to the conflict in Gaza, Malaysian palm oil exports to Egypt are projected to maintain their strength in 2024. This resilience can be attributed to the indispensable role of palm oil as a basic ingredient in a wide range of food products, including cooking oil and processed foods, making it a necessity for Egyptian consumers regardless of economic fluctuations or regional tensions.

The economic conditions in Egypt, characterized by low consumer purchasing power resulting from soaring inflation rates, will drive a significant portion of the population to opt for cost-effective products based on affordability. This trend is advantageous for palm oil as it emerges as the most economical choice for consumers. Despite expectations of a decrease in imports due to disruptions in the Red Sea, the promising numbers for Egyptian imports of palm oil in January 2024 defied these concerns. Malaysian palm oil accounted for 51.9% of the imports, surpassing Indonesian imports at 48.1%. Given these factors, Malaysian palm oil exports are positioned to maintain their robust performance throughout 2024. 

Prepared by Lamyaa El Enany 

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