Although Egypt's per-capita dairy consumption is low by international standards, producers are aiming to expand and revolutionize the local dairy market. Much of the new initiative is coming from private producers, who are expanding their overall share of sales.
Although, at 15 percent, the private sector's share of the market remains small, it has come a long way since 1995, when it only held a 3 percent share. Growing demand for dairy products and health awareness campaigns are expected to further augment its position.
The nationalization process that brought all industries under government control put Misr Dairy, a government-owned company, in charge of the industry in 1956. The sector remained under government control through the early 1970s. Since the dairy sector was opened to private participation, however, many new processors and producers have entered the market.
According to Business Today Magazine, Egypt's per capita milk consumption, at 40-50 kg per year, is only about one-fifth of the level in more developed countries. Some 15 percent of milk is consumed on farms, 70 percent is processed and distributed by vendors in the informal economy. Only 15 percent is packaged in modern dairy, of which there are more than 100 local scattered throughout the country.
Aggregate milk production in Egypt now amounts to 2.5 million tons per year, most of which is produced between January and June. During the second half of the year, Egypt depends on milk imports. The country has almost reached self-sufficiency in processed milk, white cheese, yogurt and ice cream, but it continues to import non-fat and full-cream dry milk.
Cheese production accounts for half of Egypt's dairy production, with feta cheese comprising 80 percent of the aggregate cheese market. The European Union, Australia and New Zealand are the largest suppliers of cheese, although with local production expanding, milk imports have steadily declined by 15-20 percent annually.
Tariffs on imported cheese, which range between 10-30 percent, favor local producers over importers. The government further discouraged dairy imports with a 1994 decree that required all imported food products to have at least half of their shelf-life remaining before they could go on Egyptian store shelves—a difficult standard for importers to meet considering the highly perishable nature of dairy products. A regulation introduced in November 1998 further mandated a certificates of origin for imported consumer goods, but it exempted infant milk.
In 1998, dairy imports equaled $120 million, representing merely 1 percent of Egypt's aggregate imports excluding oil and capital investments. Approximately 87 percent of imports originated from Europe and Oceania. Imported dry milk and butter comprised more than 70 percent of dairy imports.
In 1998, dairy exports represented around 2 percent of Egypt's overall finished product exports, of which 85 percent was destined the Arab markets, with the remaining 15 percent going to Europe, Sub-Saharan Africa and the United States. Saudi Arabia is the single largest importer of Egyptian dairy products, which include the Romano and Labina white cheeses, which are mainly consumed by the Egyptian expatriate community. – (Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)
