USGC Signs MOU On Storage Infrastructure With Key Egyptian Partner

Working with a leading local partner, the U.S. Grains Council (USGC) has developed a two-prong strategy to regain market share in Egypt, focusing on U.S. corn performance in the starch sector and improving local storage conditions.

Egypt is the largest corn importer in North Africa, importing 10 million metric tons (393 million bushels) annually. However, in recent years, U.S. corn exports to Egypt have suffered from strong competition from the Black Sea and South American imports. In the 2018/2019 marketing year, Egypt was the ninth-largest U.S. corn market and the leading importer of U.S. corn co-products in the Middle East region.

To tackle this challenge, the Council is focusing on improving the image of U.S. corn after it arrives in Egypt through two programs – one focusing on highlighting the superior performance of U.S. corn in the industrial starch sector, and a second focusing on addressing existing storage constraints that result in damage to stored grain because of unfavorable storage conditions at the Port of Damietta.

The three largest importers in Egypt account for almost 40 percent of all corn imports, and Cairo 3A is the largest with approximately 2 MMT (80 million bushels) per year purchased for use in the feed and food industries.

Earlier this month, the Council signed a memorandum of understanding (MOU) with Cairo 3A to improve storage conditions for grain destined for the Egyptian feed and wet-milling industries, with an additional objective of stemming negative effects on downstream industries.

“The Council has been actively engaged in promoting U.S. corn sales to Egypt, especially as it became price competitive after harvest – and that hard work is paying off,” said Ramy Taieb, USGC regional director for the Middle East and Africa. “Through our partnership with Cairo 3A, as the market leader, the Council’s technical assistance programs are expected to lead to a long-term commitment of purchasing U.S. corn. If successful, this will provide an anchor for U.S. corn in the Egyptian market.”

The goal is to highlight storage practices that will benefit Cairo 3A through improved grain quality and profitability and to grow U.S. corn imports to Egypt.

In MY 2020/2021, Cairo 3A returned to buying U.S. corn. Overall, Egypt bought more than 376,000 metric tons (14.8 million bushels) of new crop corn.

With a grant provided by the Missouri Corn Merchandising Council, USGC will be installing equipment in Cairo 3A grain warehouses designed to address specific constraints to storage that they are facing. In addition, the Council is also working with storage and starch processing consultants to highlight to Egyptian importers the economic benefits of good storage practices that maintain grain value upon arrival.

In fact, one of the key advantages the United States can use is the price savings and quality of large grain shipments against the variable quality of small shipments from the Black Sea region. The Council will focus on steering large grain buyers back to U.S. origin corn, especially those who can bring in combination shipments from the U.S.

“Expanding the U.S. market share in Egypt requires strong economic arguments and continued exchanges of technical information,” Taieb said. “By highlighting the value of U.S. corn against other origins, U.S. farmers and agribusiness can reclaim sales to the region’s largest importer.”

The Council is focusing not only on building a short-term market but also long-term Egyptian trust in food security through trade.

Learn more about the Council’s work in Egypt.