Egyptian consumers turn to potatoes as food inflations bites

The crop is particularly vital as Egypt faces inflation and reduced purchasing power due to the devaluation of the Egyptian pound.

How the Egyptian market develops will be critical for Scottish seed producers looking for high-value exports this autumn. In recent times, inflation has run at over 25% with food prices particularly vulnerable to sharp rises shifting consumer patterns in Africa’s third most-populated country.

The increase in potato prices, driven by higher demand than supply, is attributed to climate change damage and a two-year shortage of US dollars, which has affected the import of potato seeds for the growing season which ended on June 30, according to potato traders in Egypt.

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Exporting to Egypt is critical to the Scottish sector

Consumer price rise

The price spikes in the local market are expected to ease with the new season beginning in November.

“Potato cultivation typically relies on imported seeds and local leftover seeds preserved from a previous season. However, the recently ended season faced issues due to difficulties in importing seeds caused by the dollar crisis, reducing quantities by about 25% compared to previous years,” said Hatem El-Nagib, vice-president of the Vegetables and Fruits Division at the Federation of Egyptian Chambers of Commerce.

He added that the productivity of local leftover seeds has also decreased, suggesting a potential crisis in various crops due to unprecedented high temperatures and climate change.

Dropping yields

This issue has cut volumes, with yields per acre dropping from 14-16t in 2023 to 9-12t in 2024. Yields from local leftover seeds well smaller yet at between 7-10t per acre.

Thus, the quantities entering the markets for daily trading have decreased by 35-40%, causing a shortage in supply and a rise in prices to current levels.

El-Nagib stated that the wholesale price per ton ranges between EGP 19,000/t (£306/t) and 23,000/t (£370/t), while the retail price ranges from EGP 30,000/t (£483/t) to EGP 35,000/t (£563/t).

Potatoes have become increasingly important due to the rising prices of meat, poultry, fish, and other items, El-Nagib highlighted. Cash pressed families switch to potatoes when costs rise.

“The Ministry of Agriculture should release the quantities of potatoes it has obtained for testing before export operations are permitted, through its sales outlets at cost price. This would help lower prices and increase market supply,” said El-Nagib.

He suggested that potatoes should be sold at cost prices at the Ahram and Nile sales outlets and that storage locations should be monitored. Furthermore, any new export contracts should be postponed, but previously signed contracts should be honoured to maintain Egypt’s reputation in international markets, potentially reducing prices by 25-30%.

In supermarket chains such as Carrefour and Souq El Asr, the prices of potatoes range between EGP 26 (42p) and EGP 35 (58p) per kilo.

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Egyptian farmer concern

Hussein Abu Saddam, head of the Union of Farmers, told Egyptian media that the current surge in potato prices is temporary. He anticipates the next harvest will be substantial, potentially increasing market supply and reducing prices by 50% in December and January.

Moreover, Abu Saddam told Egyptian media that the price increase was due to a reduction in potato seed imports from Europe.

This resulted in fewer acres planted with potatoes, leading to a supply shortage this summer.

Nevertheless, Abu Saddam stated that since most of the next harvest’s seeds are locally sourced, Egypt will not face this problem next year.

He added that he had called for a halt to onion and garlic exports, noting that the situation with potatoes is different, as the recent price increases are only temporary.

However, Abu Saddam emphasised that stopping exports would be disastrous for farmers. “If we close these international markets, we may not be able to reopen them,” he said.

Exporting one million tones

Egypt produces 7m tons of potatoes from 600,000 acres while the Egyptian market consumes only 5m. Ten years ago less than 5mt were grown. According to Abu Saddam, farmers will practically lose money if they do not export their produce, which could drive them to stop planting potatoes altogether.

Potatoes grown for packing and processing purposes have not contributed to the crisis, as factories have pre-arranged contracts with farmers to secure their supply needs throughout the year through storage. These potatoes are typically red, known as ‘Rosetta’, and are used for frying.

Egypt ranks 10th globally in production volume and fourth in exports, according to Ahmed El-Shorbini, president of the Potato Producers Union.

According to the Ministry of Agriculture’s data, potato exports follow citrus fruits as the top agricultural export.

Regarding calls to halt potato exports, El-Shorbini stated that the Egyptian economy would suffer in the future, as agricultural exports have a unique nature compared to other export sectors. Competing countries would seize the opportunity to take over Egypt’s market share, making it difficult to recover. He also confirmed that the current crisis is exceptional due to the negative effects of climate change and the reduced quantities of imported potato seeds due to the dollar crisis.

This has lowered the amounts from 140,000t to about 110,000t, while the price of a seed potato ton rose from EGP 35,000 (£563/t) to EGP 100,000/t-120,000/t (£1,610/t to £1,932).

Furthermore, El-Shorbini pointed out that the coming phase requires state support for potato farmers to continue their production amid the rising production costs, especially for small farms.

Egypt is considering raising the prices of subsidised fertilisers by up to 30%, increasing the price to around EGP 6,250/t (£100/t) compared to the current EGP 4,800/t (£77.28/t), to counter the recent significant rise in production costs, according to government sources.