A brief hiccup disrupted the implementation of the 3-month ban on onion exports, announced by the Egyptian government on September 20 with immediate effect. Acting on the Egyptian Trade Minister's decision, Egyptian Customs issued their circular #116 banning onion exports, only to issue circular #118 rescinding the ban the following day. According to professional sources and Egyptian media reports, this is a grace period until October 1st before the ban is actually implemented.
Mina Eissa, CEO of RejoicePro and Egyptian onion exporter, explains, "The ban came as a surprise to onion exporters. There were shipments of onions in customs, or on their way to the ports, and these shipments had to be given a grace period in order for exporters to honor their commitments. We're pleased with the quick response from the authorities, and this calls for more coordination before such measures are implemented."
The hasty way in which the ban is introduced can be justified by a pressing local context, adds the exporter. "Onions are an essential product for Egyptian households and are used for everything. And it is true that exports affect local prices, driving them up. In September, the price hike reached a point that can no longer be ignored and prompted the government to take immediate action."
The rise in prices is due to the reduced acreage of onions this season, in a context of global shortage and increased demand for Egyptian onions. On the local market, "The price of onions has soared to EGP 35 per kilogram, up from EGP 27 last month and EGP 12 a year ago," reports the Al Ahram newspaper. Export prices have risen from 400 USD EXW per tonne at the start of the season to 600 USD per tonne, according to professional sources.
Mina comments on these figures, "The drop in acreage in Egypt is due to the losses suffered by growers last year, in a context of excessive production and relatively low demand and low prices. This year, however, there has been a shortage of onions at the global level due to poor weather conditions in the major origins of onions, such as the floods that hit India or the drought in Europe. In this context, despite the drop in acreage, Egyptian exports increased from 300 thousand tonnes last year to 600 thousand tonnes this year. This affected the local market, and it was necessary to protect Egyptian citizens and avoid any further challenges".
By ricochet, onion acreage is expected to increase next season in Egypt. Mina says, "Ban exports may happen again for onions or other products. The government deals with each situation on a case-by-case basis, but in general, neither the government nor the exporters want this measure of last resort."
"On the contrary, Egypt supports and encourages agricultural development and exports. It is therefore expected that acreage will increase soon to satisfy foreign demand while protecting the local market," adds Mina.
The exporter concludes, "Regardless of the acreage, the efforts of growers, exporters, and government must converge to ensure that export bans remain uncommon and a solution of exception, and this coordination must take place ahead of the season, as early as February/March."