Egypt Reopens Sugar Exports After Three-Year Halt

Egypt reopened sugar exports after a three-year suspension, seeking to absorb a large domestic surplus that has weighed heavily on prices and inflicted losses on local producers, industry officials said.

The decision, implemented in January, follows the accumulation of more than one million tons of surplus sugar at local companies, far exceeding domestic demand and pushing prices sharply lower. Egyptian authorities said exports will be allowed only for quantities exceeding local market needs, in a bid to maintain price stability while easing pressure on manufacturers.

The move marks a reversal of export restrictions first imposed in 2023 and repeatedly extended to secure domestic supplies and curb price volatility during a period of inflation and foreign currency shortages.

Sugar prices in Egypt declined by around 10% year-on-year in January, falling to about 27 Egyptian pounds per kilogram, compared with no less than 30 pounds a year earlier, according to trade officials. The drop reflects ample supply and improved market balance following increased production and imports.

Hazem El-Menoufy, head of the Ain Association for Trader and Consumer Protection, said the abundance of supply has eased earlier market tensions but created mounting challenges for producers struggling with high costs.

Hassan El-Fandi, head of the Sugar Division at the Federation of Egyptian Industries, said the government approved sugar exports this month after confirming the scale of the surplus. He estimated that Egypt imports roughly one million tons of raw sugar, which is refined locally at a cost about 3,000 pounds per ton cheaper than fully domestically produced sugar, due to a sharp decline in global prices.

Local sugar producers have faced stiff competition from refiners importing raw sugar, even as the government imposed a temporary ban on imports of refined sugar, set to expire in February 2026. Some companies, industry officials say, circumvented the ban by importing raw sugar and refining it domestically before selling it on the local market.

Egypt has around 16 major sugar producers, eight of which are state-owned. Financial strain has been evident across the sector: profits at Delta Sugar, the largest publicly listed sugar producer in Egypt, fell by nearly 60% in the first nine months of 2025.

Islam Salem, former head of Cargill in Egypt and chairman of an Egyptian agricultural company, said reopening exports could provide much-needed liquidity, allowing factories to continue operating through the upcoming production cycle rather than accumulating unsold inventory.

“Exporting sugar will help manufacturers finance their operations ahead of the next production season, instead of freezing capital in stockpiles and disrupting the production cycle,” Salem said.

Egypt’s domestic sugar consumption stands at approximately 3.5 million tons annually, a level now fully covered by local production, with an additional surplus nearing one million tons, industry officials said. Production from the upcoming sugar beet harvest is expected to begin in late February, further increasing supply.

However, not all producers see exports as commercially attractive. A senior executive at a private sugar company said current global prices make exports largely unprofitable due to Egypt’s high production costs, but added that companies are compelled to offload excess inventory.

“Exporting sugar right now is not profitable, but stockpiles must be reduced,” the executive said, requesting anonymity.

Government officials have stressed that exports will be tightly regulated to prevent domestic shortages, echoing lessons from last year, when Egypt imported one million tons of white sugar to address supply disruptions caused by foreign currency shortages and pricing distortions in local markets.