Nikolay Gorbachov, President of UGA: The Egyptian market will remain being interesting and promising for Ukrainian exporters

19.12.2017

Nikolay Gorbachov, President of the Ukrainian Grain Association, took part in the high-level agricultural investment forum “Promoting Sustainable Investment in Egypt’s Food Security” on December 5, 2017.

The Forum was organized by FAO and the EBRD in Cairo with the support of the Ministry of Agriculture and Land Reclamation, the Ministry of Investments and International Cooperation and the Ministry of Stock and Domestic Trade.  Mr. Gorbachov made a presentation on the topic “The experience of the association in public and private partnership.”

As a result of the trip, Nikolay Gorbachov kindly agreed to answer our questions:

UkrAgroConsult: What are the moods of Egyptian importers? Do private companies intend to increase imports of Ukrainian wheat? Egypt is going to expand the sowing area under wheat for the harvest of 2018, according to recent information. How can this affect the purchases of Ukrainian grain?

Nikolay Gorbachov: As a result of my visit to Egypt, I can note the uninterrupted interest in Ukrainian grain, which please us as the suppliers. The thing is that in Egypt there is positive demographic dynamics, and population growth is quite noticeable, which is the main driver of the market. It is also possible to note the growth of incomes of the population, which invariably leads to an increase in consumption. And those planned increases in acreage are not able to compensate for the growing demand for domestic consumption. This combination of factors attracts investors and banking institutions, which in turn ensures the predictability and solvency of Egypt as a whole.

UkrAgroConsult: What are the prospects for participation of Ukrainian exporters in the state purchases of GASC wheat? Russia this season has occupied the “niche”. What are the prospects for Ukrainian wheat for the next season?

Nikolay Gorbachov: GASC is a state-owned company and the largest importer of grain in Egypt. Since the beginning of this season, they have changed the quality of the purchase, or rather, increased the protein content up to 12.5% ​​from 11.5%, as was before. Ukrainian exporters were not ready for such situation, and therefore lost the priority to suppliers from other countries, primarily suppliers from Russia.

A huge crop in Russia has also been an additional factor in the weakening of Ukrainian wheat in the government supply market to Egypt. It is too early to say how the next year would be, but you can be sure that the Egyptian market will remain being interesting and highly competitive. Ukraine will continue the grain supply to Egypt, in any case.

UkrAgroConsult: How important will be the growth factor of freight rates for supplies to Egypt? Does this mean a decrease / loss of competitiveness of Ukrainian grain in the markets of Southeast Asia and a shift in the focus of trade to the North African and Middle Eastern markets?

Sales markets determine the geography of supplies of Ukrainian grain, as it was before, and the increase in the cost of delivery will not stay on the way to their expansion. Today we sell grain to Europe, North Africa and Asia. With the increase in grain production in Ukraine, our mission is to help to sell this additional amount. In our opinion, the greatest increase in consumption will be observed in Asian countries (India, China, Indonesia), so the developing strategy of the new markets, traders and governments of exporting countries are going exactly in that direction.

 

UkrAgroConsult

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