By TIM ALEXANDER
MAPLE PARK, Ill. — Egyptian demand for U.S. soybeans is booming due to growth of protein demand and increased crush capacity. Now the third-largest export market for soybeans, Egypt, the most populous country in the Middle East, is emerging as the current hot trade space for soybeans provided by Illinois and Midwest producers.
“I’m excited about this expanding market because it is fantastic for the farmers of Illinois, as we now have more places to market our production,” said Steve Pitstick, vice chair of the Illinois Soybean Association (ISA) board of directors. “Our trade partners recognize that we raise a high-quality product and are a reliable supplier.”
With new crush facilities coming online and an expanding middle class, USDA is estimating that Egypt will reach 8.4 million metric tons of crush capacity in 2021-2022. Soybean exports to Egypt began to surge in 2019, when U.S. exports of food and agricultural products leapt by 100 percent to $1.59 billion, compared to a low of $795 million in 2017. Soybean exports to Egypt accounted for $834 million through July 2020, up by 65 percent.
In addition, USDA commodity sales data shows that the U.S. shipped approximately 1.66 million tons of soybeans to Egypt between September 2020 and January 2021, an increase of 21 percent from the same time frame the previous year.
‘You have a lot of growth there with people wanting more protein in their diets. There is also an advancing aquaculture industry, and the poultry industry is growing. They are also increasing their meat production” leading to increased demand for soybean meal, said Pitstick, who is a member of the ISA government relations committee.
Pitstick, who farms in the northern Illinois community of Maple Grove, had an opportunity to visit Egypt around 20 years ago. The nation’s once-vital poultry export industry was shut down not long after his visit due to an outbreak of Avian influenza that resulted in a 14-year suspension of trade. In 2020, the World Health Organization for Animal Health finally granted approval for the resumption of poultry exports from Egypt, setting off new demand for soybean meal from the 14 poultry companies permitted to sell poultry products outside of the nation.
From their harvest in Illinois and other top soybean exporting states, soybeans begin their journey to Egypt from Mississippi River barge terminals and enter the Gulf of Mexico via the Port of New Orleans. Their journey continues across the Atlantic Ocean and through the Strait of Gibraltar before arriving in Egypt. They are then transported to a crush facility in Borg Al-Arab for distribution to animal, aquaculture and food industries.
“We are working alongside the U.S. Soybean Export Council (USSEC) to advance programs that target the whole soybean value chain in Egypt, including supporting traders, crushers, oil refiners, feed millers, poultry producers and more,” said John Lumpe, CEO of the ISA. “The success of the Egyptian industry means only good news for U.S. soybean farmers, and in particular, Illinois soybean farmers who send approximately two out of every three soybean rows to overseas markets.”
The USSEC and ISA have been working in lockstep to increase export market options for soybean producers since the Chinese trade war began under the administration of former President Trump. While it is true that the U.S.-China trade dispute compelled U.S. exporters to further diversify market priorities, strategic market development efforts to build demand and processing capabilities in Egypt has been a longer-term initiative for the U.S. soybean industry.
In fact, Egypt has been “on the map” as an emerging powerhouse for U.S. soy exports for many years prior to the U.S.-China trade war, however.
“Diversifying our export markets is not only a smart use of resources, it’s an investment in our long-play and the key to soy farmer sustainability,” said Mark Read, ISA District 5 director.
“Part of recognizing a good opportunity is preparing to be at the front end of those industry revolutions, instead of two steps behind the history makers,” added Lumpe. “For the top soybean state in the country, only history-making will do.”