Trade deficit widened in 3Q 2024 despite export growth: Egypt’s non-oil trade deficit expanded in 3Q 2024 to reach USD 10.5 bn, compared to USD 9.1 bn during the same period in 2023, marking a 15.4% y-o-y increase, according to a Cabinet Information and Decision Support Center report (pdf).

Non-oil exports showed significant growth, but were cancelled out by rising imports: Egypt’s non-oil exports rose to USD 9.8 bn, marking a 15.3% y-o-y increase from USD 8.5 bn during 3Q 2023. The uptick in exports was fueled by strong growth in key sectors, particularly electrical equipment, mineral fuels, and precious stones. Meanwhile, non-oil imports also increased substantially to USD 20.3 bn, compared to USD 17.6 bn in the same period last year.

Machinery and mineral fuels led export growth: Exports of mineral fuels, oils, and their derivatives surged 312.1% y-o-y in 3Q 2024 to reach USD 445.3 mn, making it the fastest growing non-oil export sector. Meanwhile, electrical equipment and parts contributed the most to Egypt’s non-oil exports throughout the quarter, generating USD 897.9 mn in revenue — a 34.2% increase from the previous year.

Gems, apparel, and raw materials also contributed to the export bump: Natural or cultured pearls and gemstones exports also grew 49.1% y-o-y to USD 848.1 mn, while plastic product exports increased 13.8% y-o-y to USD 687.1 mn. Meanwhile, apparel exports (excluding crochet and knitwear) also saw growth, increasing 23.4% y-o-y to USD 526.3 mn. Salt, sulfur, and gypsum materials also increased 38.2% y-o-y to USD 405.2 mn.

Food exports got a lift: Vegetable exports increased 35.4% y-o-y to USD 404.1 mn, while edible fruits and nuts rose 18.4% y-o-y to USD 356.1 mn.

ICYMI- Food exporters are among those facing lower export subsidies in the coming period, with the government announcing in November that food exports will receive subsidies of between 1.2% and 3% of the total value of exports depending on their added value.

Fertilizer and steel exports, on the other hand, saw contraction: Fertilizer exports declined 14.5% y-o-y during 3Q 2024, falling to USD 417.7 mn, while iron, steel, and cast iron contracted 21.8% y-o-y, dropping to USD 415.4 mn.

Remember: Fertilizer producers had a tough year in 2024, as the high cost of natural gas post-float and widespread disruptions in its delivery led producers to feel the financial pinch — particularly amid low global fertilizer prices.

Mineral fuels dominate export composition growth: Mineral fuels and oils witnessed the most significant increase in relative weight within Egypt’s total non-oil exports on a yearly basis, rising from 1.3% to 4.5%. Natural or cultured pearls and gemstones grew in relative weight from 6.7% in 3Q 2023 to 8.6% in 3Q 2024. Machinery, appliances, and electrical equipment also expanded, rising to 9.1% from 7.9% in the same period last year. Salt, sulfur, and gypsum materials saw a notable rise in relative weight from 3.5% to 4.1%.

Steel and fertilizer exports lost the most ground: Cast iron, iron, and steel exports as a percentage of all exports fell from 6.3% to 4.2% in 3Q. Fertilizers also dropped from 5.8% in 3Q 2023 to 4.3% in 3Q 2024, while milling products, starches, and sugar categories also saw reductions in their export shares.

Arab countries remain our dominant trade partners, though Turkey is a close third: Saudi Arabia emerged as Egypt’s top importer of non-oil goods in 3Q 2024, purchasing USD 735.9 mn worth of exports, or 7.49% of total non-oil exports. The UAE followed closely at USD 732.9 mn, or 7.46%, with Turkey in third at USD 702.3 mn, or 7.15%, showing the strength of Egypt’s regional ties.

Our trade surpluses are largely concentrated in the MENA region: Libya recorded the highest surplus in 3Q 2024 at USD 501.7 mn — nearly double that of our second biggest surplus of USD 231.7 mn with Algeria. The quarter also saw us register a USD 121.2 mn trade surplus with Switzerland, a sharp turnaround from 3Q 2023’s USD 126.4 mn trade deficit.

Our trade deficit with China, on the other hand, rose significantly, reaching USD 4.2 bn in 3Q 2024 — up 34.0% y-o-y by our math. Russia and Brazil also saw significant deficits, coming in at USD 1.21 bn and USD 1 bn, respectively.

We have room to grow in raw materials exports, according to the World Trade Center: The US’ World Trade Center identifies significant untapped export potential for Egypt in commodities like urea, raw gold, and oranges, with raw gold alone offering a potential additional USD 1.9 bn in export value.

The center also identifies the US as the largest untapped market, with opportunities valued at USD 2.7 bn, followed by Turkey at USD 1.8 bn, the UAE at USD 1.6 bn, and Saudi Arabia at USD 1.2 bn.

Your top industrial development stories for the week:

• The Federation of Egyptian Industries (FEI) is calling for the government to stabilize gas and electricity prices for factories in a bid to support wood and furniture manufacturers. (Zawya)
• The Egyptian Leasing Federation has issued a collaboration protocol for companies in the sector and the Industrial Development Authority (IDA) aimed at helping finance industrial projects established on land allocated by the IDA through financial leasing contracts. (Al Borsa)