Market opportunities available in Egypt

Continued from yesterday

1. Cooperation Agreement on Merchant Shipping between Egypt and Sri Lanka.

2. Memorandum of Understanding (MoU) on Phytosanitary Requirements for the export of Citrus fruits from Egypt to Sri Lanka. (This MoU was initiated in Cairo in August 2003).

The Great Sphinx of Giza

3. Memorandum of Understanding (MoU) on Joint Cooperation between Egyptian Small & Medium Enterprises and the Federation of Associations of Small and Medium Enterprises of Sri Lanka.

4. Memorandum of Understanding (MoU) on Insurance covering the proceeds from exports between the Egyptian Export Credit Guarantee Company and the Sri Lanka Export Credit Insurance Cooperation.

5. Memorandum of Understanding (MoU) between the Egyptian International Trade Point and the Department of Commerce of Sri Lanka.

Sri Lanka - Egypt Joint Chamber Council

A Memorandum of Understanding (MoU) on the establishment of a Sri Lanka - Egypt Joint Chamber Council, between the Egyptian Federation of Chambers of Commerce and the Ceylon Chamber of Commerce was signed during the visit of the Sri Lankan Minister of Foreign Affairs, to Egypt during April 2008.

Sri Lanka’s major exports to Egypt

Sri Lanka’s major export items to Egypt are desiccated coconut, tea, coco peat, natural rubber, tyres, woven fabrics, spices (pepper, nutmeg, cinnamon, cardamoms), rubber products, fresh coconut, porcelain tableware and kitchenware.

For many people all over the world Sri Lanka has an instant association with Tea. Sri Lanka had been a major supplier of tea to Egypt in the past.

The main reason for the sharp decline of Ceylon tea exports to the Egyptian market was reduction of customs tariff on the tea from COMESA (Common Market for Eastern & Southern Africa) member countries.

But the recent reduction of customs tariff in Egypt from 30 percent to 5 percent is providing an opportunity for “Ceylon Tea” to re-enter the Egyptian market.

According to the statistics, the famous Ceylon Tea is entering the Egyptian Market again.

Sri Lanka has a product line of over 2,000 items and hopes to find market opportunities for products that have yet to be introduced into Egypt. Also being promoted are Sri Lankan handicrafts, precious stones and ceramic ware.

Further Sri Lanka is looking to export value added products to the Egyptian market.

In this respect, the Free Trade Agreements in place with India and Pakistan have provided ample opportunities for Sri Lanka to increase exports of value added items to Egypt.

As shown in the table, trade between the two countries has been continuously in favour of Sri Lanka. The total trade turnover which stood at US$ 14 million in 2002 increased to US$ 30 million in 2007.

Sri Lanka’s total exports to Egypt has gradually increased, while the Sri Lanka’s total imports from Egypt for the period from 2002 to 2007 have fluctuated.

However in year 2006 there was rapid growth of both imports and exports between the two countries.

Sri Lanka’s favourable balance of trade also continue to increase up to 2005 and thereafter it has slowly declined.

By 2007 it had decreased to US$ 7.4 million or by 32.5 percent when compared to 2005.

Sri Lanka’s Exports to Egypt

Potential Sri Lankan exports

Sri Lanka’s total exports to Egypt demonstrated continual increases from 2002 to 2007.

In 2006 and 2007 exports, it showed rapid growth due an increase in the export of tea, tyres and natural rubber. Sri Lanka’s major export items to Egypt during the last three years were Desiccated coconut, Tea, Pneumatic tyres used in buses or lorries, Smoked sheets of natural rubber, Raw coconut coir, Nutmeg, woven fabrics, boilers and machinery and parts Paper/paperboard and labels of all kinds (whether printed or not).

Sri Lanka’s Imports from Egypt

Sri Lanka’s total imports from Egypt fluctuated during the last six years. When compared to Sri Lanka’s total exports, Sri Lanka’s total imports were at a lower level. However the year 2007 showed the highest total import value during the last few years.

After 2006 Sri Lanka’s total imports from Egypt demonstrated a rapid growth due to an increase in imports of three products namely; super phosphates - (HS 310310), mixtures of odoriferous substances (HS 330210) and prepared binders for foundry moulds (HS 382490).

In addition to these three products alkyd resins, marble, travertine, urea, (whether or not in aqueous solution), other parts of plants, Seeds of fennel and juniper berries, rubber and articles thereof, processed cheese, yeast, and natural steatite were Sri Lanka’s major import items from Egypt.

Potential Sri Lankan products that could be promoted in the Egyptian market

* Tea Coconut Products

* Fresh coconut

* Coconut fiber

* Desiccated coconut

* Coco peat, Coir door mats

* Polished coconut shells

* Grow bags

* Natural Rubber

* Rubber products

* Spices Tamarind

* Cashew

* Ready made Garments

* Leather products

* Ceramic and Porcelain ware

* Gems & Jewellery

* Toys

* Handicrafts

* Ornamental Fish etc.

Egypt plays an important role in Africa and the Middle East both politically and economically. She remains the most influential power and a trade hub in the region.

Egypt takes productive steps to enhance and strengthen trade and economic relations between other countries in the world. She has rapidly shifted towards a market-oriented economy and has undertaken several reforms for economic development of the country.

The Egyptian government has implemented a number of programs on fiscal, structural, economic and legislative reforms encompassing banking, investments, telecommunication and labour. The Customs tariff reductions in December 2004 were also a part of the reform programs implemented by the government to revive the economy.

Since Egypt is situated at the crossroads between Europe, Africa and Asia, and at the heart of international trade routes, shipments of goods pass through the Suez canal of Egypt to the main ports of “Port Said” and “Alexandria” in the Mediterranean sea of northern Egypt and then pass on to the European countries and Middle Eastern countries.

Egypt also has trans-shipment routes to her neighbouring countries Sudan, Libya, Algeria and Morocco in the African continent. In December 2004 the Egyptian government, reduced import tariffs on several items which are of export interest to Sri Lanka such as tea, coconut, spices, rubber tyres etc. Therefore, there is potential to expand and promote existing and new products in the Egyptian market.

Sri Lanka and Egypt have been negotiating a Free trade Agreement (FTA) since November 2002 with the aim of removing tariff and non-tariff barriers and further enhancing and strengthening bilateral trade and economic relations. Once the FTA is signed and ratified, it will enable regain of the lost tea market due to COMESA, and also to have greater market access for other Sri Lankan products in the Egyptian market.

Sri Lanka Exporter