Egypt has extended its ban on sugar imports for a further three months.
This gives local companies further opportunity to clear stocks.
The Government estimates sugar stocks at 1.4m tonnes, but we think this is too high and stocks could be as low as 895k tonnes.

Egypt Extends Sugar Import Ban for Three More Months

Back in June, Egypt banned all sugar imports for three months in order to prevent low domestic prices from harming the local cane and beet sector.
On Wednesday, the country confirmed that it will extend this ban for a further three months.
This extension will come into effect once it has been officially published in the gazette.
We retain our view that this won’t hugely impact the sugar market, despite the fact Egypt is a key sugar importer.

Find the relevant data here.

The Government’s assumption that stocks are nearer to 1.4m tonnes may be politically motivated, in order to help them justify the extension of the import ban.

Will the Exemptions Be Extended?

When the ban was first introduced, key producers (such as the raw sugar refinery) and consumers were exempted so they could still import the sugar they required.
Those that were exempt from the initial ban will likely have these exemptions extended.
Nevertheless, the ban does still undermine other trading relationships.
For instance, Egypt and the EU benefit from a Free Trade Agreement, but this ban means Egypt goes against the terms of that agreement, disallowing the import of EU refined sugar.

It’s not yet clear whether this is the last time Egypt will extend its import ban.
News broke recently that Egypt is forming a Commodity Exchange which will enable it to trade sugar with the wider market.
However, it is extremely unlikely that Egypt will become a large-scale sugar exporter anytime soon as its deficit is too severe.
The creation of this Exchange may therefore be a government attempt to dilute the power some of its producers and traders have.
The Exchange should improve price discovery and lessen the ability these key players have to flood or squeeze the market as and when they please.