{"id":614163,"date":"2024-01-28T00:00:00","date_gmt":"2024-01-28T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/egypts-dairy-industry-is-facing-high-cost-burdens-and-not-enough-regulation-to-maintain-quality-standards\/"},"modified":"2024-01-28T00:00:00","modified_gmt":"2024-01-28T00:00:00","slug":"egypts-dairy-industry-is-facing-high-cost-burdens-and-not-enough-regulation-to-maintain-quality-standards","status":"publish","type":"inside_industry","link":"https:\/\/enterpriseam.com\/egypt\/inside_industry\/egypts-dairy-industry-is-facing-high-cost-burdens-and-not-enough-regulation-to-maintain-quality-standards\/","title":{"rendered":"Egypt\u2019s dairy industry is facing high cost burdens \u2014 and not enough regulation to maintain quality standards"},"content":{"rendered":"

Faced with rising input costs, our dairy industry is struggling to keep up:<\/strong> The dairy industry in Egypt is looking for solid footing with the help of the government to lure in investments that could propel the industry to higher productivity rates and boost exports. Industry players Enterprise spoke with pointed to a shortage of high-quality milk, tough competition from a large (and largely informal) sector thanks to small factories, and rising costs.<\/p>\n

The sector, by the numbers:<\/strong> Egypt produced around 7 mn tons<\/a> of dairy by the end of 2022. Out of 18k food-related businesses registered with the Chamber of Food Industries, 1,590 of those are members of the dairy and dairy products division. The majority of our dairy production is concentrated in Beheira, which produces 534.8k tons, followed by Damietta (221.8k tons) and Menoufia (138.1k tons). We also have 826 milk collection centers across the country, according to Agriculture Ministry data<\/a>. <\/p>\n

One bid to ensure healthy + better quality milk? Setting up more milk collection centers.<\/strong>Last year, the Agriculture Ministry kicked off<\/a> an EGP 1 bn national project to establish new milk collection centers with upgraded specifications to cut down on milk loss and spoilage, ultimately providing healthy and safe dairy products to the market at reasonable price points. To date, the ministry has spent around EGP 400 mn to set up 34 new centers and upgrade 218 existing centers, with the remaining stages of the plan still underway, a ministry source told Enterprise. The project is focusing primarily on rural villages, particularly those that fall under the Hayah Karima (Decent Life) initiative.<\/p>\n

But even with better infrastructure, producers are struggling with a leap in input costs:<\/strong>Since April, production costs for dairy producers have jumped by no less than 50%, broadly as a result of the rising cost of importing feed for dairy cows, which had knock-on effects, Katilo Cheese Chairman Abdel Moneim Katilo told Enterprise. Powdered milk prices have also jumped, Katilo said, meaning the end products sold to consumers have also gotten more expensive, regardless of whether they are made with real or powdered milk. <\/p>\n

A fragmented industry has also made it more difficult and more costly:<\/strong> The dairy industry is broadly reliant on small factories or laboratories, which are unlikely to yield standard or uniform quality products, while larger factories are primarily focused on maintaining quality standards and protecting productivity levels. This lack of enforced quality standards is problematic, and could be resolved by mandating the National Food Safety Authority with overseeing all milk collection centers to ensure they are meeting specifications for milk preservation, head of the Chamber of Food Industries\u2019 dairy division Ahmed Ghazi said.<\/p>\n

The quality problem starts on the farm:<\/strong> Although Egypt has plenty of livestock, farmers\u2019 lack of awareness or adherence to storage and packaging requirements leads to large amounts of milk production that is unusable for some dairy producers, Farmers\u2019 Syndicate head Hussein Abu Saddam told Enterprise. This shortage of high-quality local milk has pushed many cheese producers to rely more on imported powdered milk, he said. Higher feed prices also led to lower livestock productivity, which Abu Saddam suggests the government could address by encouraging the cultivation of fodder crops as alternatives to imports. Farmers could provide alternatives to imported fodder, including alfalfa and yellow corn, provided that these crops are also subject to international quality standards to avoid harming the remainder of the dairy supply chain, Abu Saddam suggested. <\/p>\n

In the meantime, prices are jumping \u2014 but the market appears to be absorbing it so far<\/strong>, Katilo said. However, there are signs that prices could begin leveling off, Katilo suggested, while Abu Saddam stressed that product prices will only begin to cool down if fodder is provided to farmers at lower price points to encourage higher production of milk that dairy producers can then rely on. <\/p>\n

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