The Egyptian government raised the import Wheat price 8% to 885 pounds per ardeb (150 kilograms) instead of the 820 pounds

Newsletter

17 Mar 2022

For our top talks today, the Egyptian government raised the import Wheat price 8% to 885 pounds per ardeb (150 kilograms) instead of the 820 pounds previously announced, in light of the rise in fertilizer prices and the cost of labor, in addition to the lack of global supply of the basic primary commodity, according to a cabinet statement, this is the second time it has been raised the government’s wheat supply price. Wheat farmers in Egypt were demanding an increase in the supply price by 22% over the price offered by the government, from 820 pounds to 1,000 pounds per ardeb. The Egyptian government raised the price of wheat supply from farmers this season by 13% to 820 pounds per ardeb, and its purchasing estimates increased by 67% to about 6 million tons from farmers, instead of 3.6 million tons purchased last season. The Egyptian government is betting on providing several incentives “under study” to farmers, in order to push them to import wheat to it instead of the private sector. (Bloomberg Asharq)

Egyptian President Abdel Fattah El-Sisi has directed the government to set a fixed price for unsubsidized bread.
The president ordered the Ministry of Supply to provide the necessary flour for bakeries to control prices. He also urged for setting an additional incentive to local wheat procurement price per ardeb for the current harvest season. The president called for conducting a study on the production cost of unsubsidized bread and to monitor the prices of bread. Moreover, El-Sisi requested diversifying the sources of strategic commodities and boosting their reserve for not less than six months. These decisions come as part of the government’s efforts to ensure supplying all strategic commodities to citizens ahead of the holy month of Ramadan amid the ongoing Russia-Ukraine war. (Arab Finance)
A shipment of 30,000 tons of wheat from France is on its way to Egypt.
This comes as part of a “rare French sale” to the Egyptian private sector, traders told the news agency, indicating that the importer is not the state-buyer General Authority for Supply Commodities (GASC). Regarding this matter, an Egyptian official source confirmed that the cargo was not for the GASC. The European Union (EU) countries have been witnessing an increase in demand for wheat despite higher prices due to disruption to Ukrainian and Russian exports. In February, the GASC received a wheat cargo of 60,000 tons from France, the EU’s largest wheat exporter. (Reuters)
Earlier this month, the Egyptian Finance Minister that the rise in wheat prices in global markets would lead to an increase in the cost of the country’s imports of this commodity, with a value ranging between 12 to 15 billion pounds in the budget for the current fiscal year 2021-2022.
Global food prices jumped to a record high last month, as Russia's invasion of Ukraine began to wreak havoc on global crop trade that is likely to raise costs further. Egypt expects the volume of government imports of wheat to decrease in 2022 to 5.3 million tons, “supported by increased production locally.” Egypt’s government imports of wheat reached 5.5 million tons in 2021. (Bloomberg Asharq)
Egyptian Prime Minister Mostafa Madbouli has issued a number of decrees regarding tax incentives under the Investment Act of 2017.
Accordingly, the decrees are applied to sub-sectors of investment activities within the geographical scope of sectors A and B. The sub-sectors are distributed within the sectors of electricity, renewable energy, education, and sports. Under the new decrees, investment activities related to green economy, artificial intelligence, innovation support, scientific research, and localization of industries will benefit from the tax incentives. A new clause has been added to the sub-sector of wooden industries, furniture, printing, packaging, and chemical industries, stipulating manufacturing safe eco-friendly alternatives to single-use plastics. It is worth noting that investment projects subject to the Investment Act are granted tax incentives that are deducted by 50% and 30% from investment costs of companies under sectors A and B, respectively. (Arab Finance)
Egypt’s trade balance deficit fell by 21.6% to $2.41 billion in December 2021, as compared to $3.08 billion in the same month of 2020.
The value of Egyptian exports rose by 45.3% year-on-year (YoY) to 4.32 billion USD in December 2021 from 2.97 billion USD. This growth is attributed to the increase in the value of some goods’ exports, including ready-made clothing and plastics by 33% and 28.4%, respectively. Moreover, the value of Egypt’s imports stood at 6.73 billion USD last December, increasing by 11.3% from 6.05 billion USD in the corresponding month of 2020. The increase in imports value was driven by the uptick in some imports’ value, including petroleum products and passenger cars which surged by 71.2% and 50.8%, respectively. (the Central Agency for Public Mobilization and Statistics (CAPMAS))
Shell Egypt has signed a memorandum of understanding (MoU) with Egypt’s National Training Academy to introduce Shell NXplorers to the training programs of the academy.
Shell NXplorers is a training program specialized in the development of sustainable solutions. The MoU aims at reinforcing cooperation between the two parties in supporting youth and improving their skills. The signing ceremony has been witnessed by the Egyptian Minister of Petroleum Tarek El Molla. (Arab Finance)
And for our EGX and companies talks, Alexandria Agriculture Company (Lamar) is planning to invest over 500 million EGP (31.8 million USD) in three years, according to the company’s CFO Youssef Talaat.
This amount will be pumped into expansion in food and beverage production, supporting animal husbandry, and improving the distribution fleet. In 2021, the company’s investments amounted to 250 million EGP, pointing out that its loan balance stood at 150 million EGP. Meanwhile, sales exceeded EGP 1 billion last year, he mentioned, adding that the company seeks to record sales of over 1.5 billion EGP in 2022 and of more than 3 billion EGP within the coming five years. Moreover, he noted that Lamar will launch new factories within three to five years. Exports account for 5% of Lamar’s current sales and it targets increasing this percentage to 15% within three years through further expansion in Africa and the Middle East, the CFO highlighted, pointing out that the company exports products to more than 20 countries worldwide. (Asharq Business)
PepsiCo Egypt has pumped investments worth 5 million USD in the technology infrastructure programs related to sales in 2021, according to the Chairman Mohamed Shelbaya.
These investments have contributed to boosting the sales volume by 10% last year. In 2021, the company has invested $100 million in extending agricultural area, setting up four new production lines, developing technology infrastructure, and designing innovative campaigns for customers. The company is currently collaborating with more than 5,000 farmers across several governorates in Egypt, pointing out that it targets cooperation with more farmers by 12% to 15% this year. (Hapi Journal)
Development and Engineering Consultants (TAMEER) (DAPH) has launched AZ Homes housing project in the Fifth Settlement.
The project includes various spaces, installment systems, and an eight-year payment plan. Located in AZAD Views complex near the American University in Cairo (AUC), the residential project is 20 minutes away from the New Administrative Capital (NAC) and 15 minutes away from Cairo International Airport. AZ Homes comprises 284 units of different spaces to cater to the needs of all customers. Unit spaces start from 56 square meters (sqm) studios up to 133 sqm three-bedroom apartments. Moreover, the project is slated for completion and delivery in 2025. All amenities are provided, along with common area, co-working space, and a gym. (Arab Finance)
Housing and Development Bank’s (HD Bank) (HDBK) is targeting a 9% year-on-year (YoY) increase in net profit after tax in 2022.
The bank is seeking to generate 2 billion EGP profits after tax in 2022, compared to 1.83 billion EGP in 2021. Loans and credit facilities are targeted to grow 23% YoY to 30.071 billion EGP. It is worth mentioning that Al Ahly Pharos Securities Brokerage Research maintained its ‘Overweight’ recommendation for HD Bank’s stock, with a fair value (FV) of 54 EGP per share. (Al Mal)