Egypt Builds First Full-Year Sugar Reserve as Retail Prices Fall Toward EGP 25 per Kilogram

Lower global prices expand Egypt’s options

Sugar prices in Egypt have fallen noticeably in recent weeks, approaching EGP 25 per kilogram, as lower international prices, increased domestic supply and government stockbuilding reshape the market. Al-Masry Al-Youm reported that the country’s strategic reserve now covers a full year of consumption for the first time.

Ahmed Fendi, head of the Sugar Division at the Federation of Egyptian Industries, said raw sugar prices had declined on global exchanges over recent months. The resulting reduction in import costs prompted Egyptian factories to review their prices to protect their competitiveness and domestic market share.

The government used the decline in international prices to expand its reserve while releasing additional sugar through public outlets at EGP 25 per kilogram. According to Fendi, the additional volumes strengthened supply and helped reduce prices in the open market. He also said Egypt was approaching self-sufficiency in sugar, improving availability for consumers.

Factories face a widening cost-price gap

The benefits for households contrast with growing pressure on local manufacturers. Domestic production costs have risen after the government increased the procurement price paid by factories for sugar beet during the current season. The measure was intended to support farmers facing higher production expenses, but it also raised the cost of locally produced sugar.

An official at a sugar factory told Al-Masry Al-Youm that importing raw sugar and refining it in Egypt had become cheaper than producing sugar locally. Factories currently sell at an average of EGP 21,000-22,000 per tonne, according to the official, while a price incorporating an appropriate profit margin would need to be at least EGP 25,000-26,000 per tonne. After distribution and trading costs, that would imply a consumer price of about EGP 28 per kilogram.

The current gap between production costs and actual selling prices is compressing margins and causing some companies to record losses. Continued weakness in international prices may intensify that pressure because imported raw sugar remains a cheaper input for refiners and sets a difficult benchmark for beet-based domestic production.

Global market remains volatile

International sugar prices declined during 2026. Data cited from the UN Food and Agriculture Organization showed that its global sugar price index fell 5.7% month on month in June, driven by greater supplies and improved production expectations. The index recovered somewhat in July amid concerns about weather conditions and their potential effect on output, highlighting continued volatility.

Ashraf El-Gazayerly, chairman of the Food Industries Chamber at the Federation of Egyptian Industries, said the sector must balance three objectives: a fair consumer price aligned with global averages, sustainable profitability for domestic manufacturers and continued support for farmers to encourage sugar-beet cultivation.

Industry calls for market-based support

El-Gazayerly argued that free-market mechanisms across the sugar supply chain would provide the best route to that balance. He also proposed a fund to support farmers and compensate them for unexpected increases in production costs without interfering in contractual pricing relationships.

Such an arrangement could separate agricultural support from factory procurement prices, limiting additional burdens on processors. For Egypt’s sugar industry, the full-year reserve strengthens food security and gives the government greater flexibility, but the durability of local production will depend on whether factories can cover costs while farmers retain sufficient incentives to plant beet.