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Observation of North African Market: Market access not easy in Egypt, government encourages safer pesticides
Oct. 14, 2019
With the gradual maturity of emerging markets, such as the Middle East, Latin America and Eastern Europe, in recent years, Africa, a relatively new and promising region, began attracting the industry’s attention. Many companies, especially Chinese and Indian companies, are considering the potential of the African market.
North Africa is one of the continent’s key agrochemical markets. However, due to the lack of detailed market data from the industry and the region’s complicated registration regulations, the market has always been slightly mysterious. Therefore, AgroPages took the opportunity to interview leading companies from various countries in the North African market, in the hope of de-mystifying this market through their information and analysis. In the Egypt part, we interviewed Walaa Abdel Ghany El Sayed, General and Technical Manager of StarChem Industrial Chemicals, Shoura Group; Yehia Hamada, Product manager at CAM FOR AGROCHEMICALS and Mohamed Arkoub, Marketing and Development manager (Egypt & Export countries) at Chema Industries.
North Africa market overview
Geographically, North Africa refers to countries located on the Mediterranean coast of North Africa, including Egypt, Libya, Tunisia, Algeria, Morocco and Sudan. Agriculture is a key sector in most of these countries, and the average contribution of the agricultural sector to their total gross domestic product (GDP) is around 13%. The sector also provides 25% of jobs in these countries.
North Africa’s agricultural regions are located in coastal areas and river valleys, and crop cultivation is heavily dependent on rainfall, especially among small-scale farmers. Agriculture is driven by the topographic characteristics of the land and climatic conditions. Therefore, the share of cropped land is generally low, except in Tunisia (see Table 1).
The agrochemical markets of North African countries vary widely, and their individual potential, legislation and organization are different. Egypt is the largest market, in terms of consumption, valued at US$350 million, followed by Morocco with $220 million, Algeria with $90 million, then Tunisia with $50 million.
Table 1 Agriculture overview of North African countries
| Key Agriculture Figures | Morocco1 | Tunisia2 | Algeria3 | Egypt4 | Sudan5 |
|---|---|---|---|---|---|
| Agricultural Land | 9 million Ha (15%) | 5.5 million Ha (32%) | 8.5 million Ha (3.6%) | 3.3 million Ha (4%) | 17 million Ha(9%) |
| Irrigated Area | 1.5 million Ha | 0.42 million Ha | 0.987 million Ha | 2.7 million Ha | 1.9 million Ha |
| Number of Farms | 1.8 million | 0.516 million | 1.198 million | - | - |
| Average Farm Size | 5 Ha | 10.2 Ha | 8.6 Ha | - | - |
| Farm smaller than 10 Ha | 70% | 75% | 70% | 80% | - |
| % of GDP (2017) | 17% | 12% | 12.3% | 11.5% | 35% |
| % of employment (2017) | 38.8 % | 16% | 10.4% | 29% | 70% |
| Main Crops | Cereals, Vegetables crops, Strawberries, Grapes, Citrus, Fruit trees | Olives, Cereals, Stone fruit, Vegetables Crops, Palm trees | Cereals, Vegetables crops, Fruit trees, Potato, Citrus, Palm trees | Sugar cane, Sugar beet, Wheat, Rice, Maize, Cereals | Sorghum, Groundnuts, Wheat, Cotton, Sunflower, Forages |
| Output value of the agricultural industry in million Euro | 15,370 | 3,356 | 14,314 | 27,127 | 37,207 |
| 1 from Ministry of agriculture Morocco, ONCA, 2 from Ministry of agriculture Tunisia, National Statistical Institute (INS) 3 from Ministry of agriculture Algeria, Office National des statistiques ALGERIE (ONS) 4 from Ministry of agriculture Egypt, Egypt Data portal 5 from Ministry of agriculture Sudan Ps: The data was compiled by Moroccan company - ABC agrobusiness CONSULTING. | |||||
The agrochemical markets of North African countries vary widely, and their individual potential, legislation and organization are different. Egypt is the largest market, in terms of consumption, valued at US$350 million, followed by Morocco with $220 million, Algeria with $90 million, then Tunisia with $50 million.
Agriculture in Egypt
Egypt’s agricultural region is confined to the Nile Valley and Nile Delta, along with a few oases and some arable land in Sinai. The Nile is an exceptional source of water, and the soil around the river is generally of high quality. The country’s cultivated area totals 7.2 million feddans (1 feddan equals 0.42 ha), representing only 4 % of total land area. The government is working to implement a major investment plan to increase agriculture areas, by adding 3 million feddan through reclamations. Egypt’s entire crop area is irrigated, except for some rain-fed areas on the Mediterranean coast. Over the past four decades, an area of 900,000 feddans of newly reclaimed land was added to Egypt’s agricultural area.
Landholdings are fragmented, with the average size of farm units being 2.5 feddans. The total area farmed annually is about 11.5 million feddans, which represents a cropping ratio of about 2:1. Egypt has an arid climate, with an annual average rainfall ranging from 60 to 190 millimetres, mm, along the Mediterranean Coast, 25 to 60 mm in the Nile Delta, and less than 25 mm in Upper Egypt and adjacent areas. The climate is generally stable with good sunshine.
Agriculture represented 11.5% of GDP in 2017, valued at $235.4 billion, which includes various field and cash crops, such as rice, cotton, and fruits and vegetables.
Table 2 The main crops planted in Egypt
Wheat is the major winter cereal grain crop and the leading crop in terms of area planted, totaling around 3.8 million feddans. Rice, which is grown on nearly 1.6 million feddans of land, ranks as the second most important export crop after cotton, while maize is the third most important crop, but at least 50% of production is used for livestock and poultry feed. Cotton has traditionally been Egypt’s most important fiber crop and leading agricultural export crop, while sugar cane is the main sugar crop in Upper Egypt, with some 90% of total yield being used for sugar extraction. Sugar beet also grows in large areas of the Nile Delta and contributes significantly to the country’s sugar industry. Egyptian clover (berseem) is the major winter forage crop cultivated in the Nile Valley and Nile Delta, and is the country’s most widely grown field crop, occupying an area totaling 1.2 million feddans.
Citrus crops, primarily oranges that represent 85% of total citrus production, are grown on 535,000 feddans of land. Other subtropical fruits are also grown in Egypt, such as grapes, stone fruits and pome fruits. Tomatoes are grown during three seasons, winter, summer and autumn, on around 3% of Egypt's total planted area. Losses to tomato crops have been considerable due to damage caused by tomato leaf curl virus, early and late blight, and nematodes.
Overview of Egypt agrochemical market
 |
Egypt’s total consumption of pesticides for agricultural purposes amounts to 9,000 tons for the summer and winter crop seasons, on an area of around 15 million acres. The average consumption of pesticides for every person in the country is 73.5 grams per person per year, which is five times lower than the international average of 385 grams per person per year.
Egypt imports pesticides from 27 countries. According to recent statistics, in terms of the quantities of pesticides exported to Egypt, China ranked first with 2,000 tons, accounting for 21.03% of total imports to Egypt, followed by India with 1,700 tons or 18.93% while Germany ranked third with 1,200 tons or 13.36%. Spain ranked fourth with 5.51%, followed by Japan with 4.31%, France with 3.26%, and Switzerland with 2.55%.
The total number of pesticides registered with generic names in Egypt is 273 pesticides, while the number of commercial products is 1,586. Biopesticides are not popular in Egypt, except for Bacillus thuringiensis, which is registered at the Egyptian Ministry of Agriculture. According to data provided by Dr. Walaa Abdel Ghany El Sayed from StarChem Industrial Chemicals, biopesticide use accounted for 11.4% of total pesticide use in the country.
Table 3 Commonly-used pesticides in Egypt
Expenditure on pesticides in relation to the requirements of agricultural production in Egypt is about 6%, at a cost of 60 pounds per feddan, based on a total crop area of 15 million feddans. The cost of pesticides used in agricultural production is about LE2 billion.
There are 23 pesticide factories in Egypt, which all formulate and repackage pesticides, and three factories are working on pesticide synthesis without intellectual protection.
Registration and regulation of agrochemicals
The Agricultural Pesticide Committee (APC) is the sole statutory agency responsible for the registration, handling and use of agricultural pesticides in Egypt. The APC resolutions are binding to all stakeholders and concerned parties, each within its mandate, through its assignments, procedures and directives.
The APC monitors the laboratory and agricultural practices of designated quality assurance agencies, in line with its assessment criteria based on the International Code of Conduct issued by the Food and Agriculture Organization (FAO/UN).
The APC endorses every action that supports the rational use of pesticides and the implementation of IPM policies and strategies.
Anyone who applies agricultural pesticides must have a pesticide applicator license issued by the APC, which is only granted to pesticide applicators with a diploma, who successfully pass the APC’s specialist training programs. The license must be renewed every four years.
The APC upholds the FAO/UN definition of the term "pesticide" and the concept of "safety" referred to in the FAO Code of Conduct. The word “safety” implies that a pesticide must be safe for human health and the environment, and benign to agricultural crops and their products.
The APC registers the active ingredients of agricultural pesticides based on their "technical grade" or "formulated" forms, according to the reference databases of registered pesticides of the European Commission (EC), the U.S. Environmental Protection Agency (U.S.EPA), and other agencies accepted by APC.
Unless agricultural pesticides are registered by the APC and meet the required conditions and procedures, producing, formulating, repacking, importing, trading, handling and using unregistered agricultural pesticides in their technical grade or formulated forms are prohibited.
To register pesticides in Egypt:
1. You must submit pre-requirement documents, such as a copy of the sheet noting the product that you intend to register in Egypt, along with information on active ingredients, contents, affected pests, rate of use, suitable crops, trade name, local company name and manufacturer name. A technical data sheet, certificate of ICAMA and authorization letter must also be submitted.
2. Registration of experimental test field for one crop and one pest will take two years.
3. Field testing samples should be sent to the MOA every year, for a period of two years, including additional samples from PHI tests and physical and chemical properties, to the central lab in Cairo.
Information and documents required for registration are as follows:
1. Authorization letter (original, legalized by chamber of commerce and Egyptian embassy in your country)
2. Manufacturing license (original, legalized by chamber of commerce and Egyptian embassy in your country)
3. Certificate of origin (ICAMA) (original, legalized by CCPIT and Egyptian embassy in your country)
4. Certificate of analysis and impurities
5. Certificate of composition
6. Certificate of guarantee
7. Original label of product from country of origin
8. Technical datasheet
9. Acute toxicity studies on formulation compounds
10. Sub-chronic toxicity studies on technical grade
11. Chronic toxicity studies on technical grade
12. Eco-toxicological studies on formulation compounds
13. Analytical method of formulation compounds
14. Residue analysis method
15. Analytical method of impurities
16. MRLs, ADI and PHIs
17. Safe handling, storage and disposal
18. Letter of guarantee related to packing
Before I wrote this article, I asked readers about the North African agrochemical market. They said that registration in the Egyptian market is relatively difficult, so I specifically asked Yehia Hamada (Product Manager at CAM FOR AGROCHEMICALS) and Dr. Sayed (Representative of StarChem Industrial Chemicals) about this issue.
Hamada told AgroPages that the registration process in Egypt takes a long time, often over two years. Products should also meet EU standards based on two years of field testing, even after obtaining registration from the APC, which will test the product thoroughly, in terms of its active ingredients, impurities, storage, solubility, emulsion, suspension, and the quality of packing. To pass the field test, the product should be completely successful during biological testing and analysis testing for two years. There is only one chance to repeat the biological test in the first year and second year.
Regarding Chinese suppliers, Hamada added that the APC is always checking their ICAMA PD. No. during registration and importation, to check if their ICAMA certificates are real or fake and valid or invalid, as well as assess the details of their ICAMA for errors. If the ICAMA certificate has expired, the product’s local certificate of registration in Egypt will also expire. Some Chinese suppliers do not conduct acute toxicity studies, sub-chronic and chronic toxicity studies and environmental toxicity studies, and sometimes, Chinese suppliers have asked Egyptian importers to provide the required documents and bear the cost of shipping, although most Egyptian companies refuse to pay.
In addition to the above information, Dr. Sayed also talked about other factors, stating, “The APC follows strictly the regulations of the EPA and the EU, meaning that if a product is suspended or banned in Europe, we will also ban it in Egypt. This may limit choices, but I guess it is more secure.”
Here in Egypt, we cannot register a mixture, whether insecticide or fungicide, unless it is previously registered at the EPA or the EU, therefore, limiting our choices and making our standards stricter. But this will increase the effectiveness of available products, as they are already traded in Europe or the US with no compatibility issues.
“Our registration process takes around 3 years, which your readers may think is a long time. But it is an acceptable period, compared to other countries, such as Brazil, where registration can take five to six years’” he added.
Dr. Sayed also believes that even after registration, the company's capabilities will have a profound impact on subsequent market performance.
“Quality of products is a crucial issue. Egypt has a high-tech authority lab (CLP) that is certified by and follows the strict quality specifications of the EPA, FAO and the EU. Therefore, any quality issues will be detected, so many major shipments are returned to China as their product quality does not meet international standards.
“Secondly, International companies in Egypt have also recently started following a strategy to offer lower prices, while Chinese companies are still demanding high prices, making customers prefer the products of international companies, as long as the price gap is not significant. This is part of Egyptian culture. So, I believe that Chinese companies need to revise their prices to survive and be profitable in the Egyptian market,” Dr. Sayed added.
“The last reason, I am sad to say, is that some Chinese companies choose small Egyptian companies as partners, but these local companies lack credibility and are not trustworthy. They are also unable to bear the cost of registration and do not have the ethics that prevent them from using illegal methods to reach their goals. These companies are then blacklisted by the APC, making their Chinese partners feel that it is hard to enter the Egyptian market, which is not true. So, my personal advice is to carefully choose your partner in any business.”
Impact of China’s environmental inspections
In terms of numbers, China is the largest exporter of pesticides to Egypt, bonding them together and meaning that they are affected by even small factors and changes. Therefore, China’s environmental inspections held last year, significantly affected their business relations.
Some major factories in China were closed or had their production suspended, causing a notable shortage of TC and raw materials, which led to price rises that affected the competitiveness of the market and made it difficult for multinationals to maintain the same prices.
Some companies were still able to provide these products, but could only offer them at the wrong time. As everyone knows, the agriculture business is based on seasons, so if TCs are only available out of season, then they will never be used. So timing is crucial after the disrupted environmental inspections that happened recently.
China’s environmental inspection of its chemical industry affected the importation of pesticides from China to Egypt, and some pesticides technical grades are no longer available, while the prices of available Chinese products increased by 50% to 60%. Egypt’s unstable currency also affected pesticide imports.
Hamada thinks that to solve this issue, relevant authorities must encourage the use of safe pesticides, and facilitate the registration and production of new types of safe pesticides to replace harmful pesticides.
“As you know, some pesticides classes are cheaper than other products, such as organophosphorus and carbamate. But Egypt, we mainly use chlorpyrifos, malathion, dimethoate, methomyl, mancozeb and glyphosate, and all these products do not have a future in Egypt’s agribusiness sector. Glyphosate will also be banned in Egypt in 2023, and other products are decreasing in use by 10% every year. The APC always encourages local companies to register new pesticides generations, or off-patent pesticides, and has adopted many restrictions on pesticide registration and importation from China and other countries, to control illegal pesticides,” Hamad explained.
Market challenges
“Egyptian agriculture is also facing many real challenges to its ongoing development, such as the effects of climate change on crop cultivation, unstable crop acreage and no clear planting strategies that will lead to major fluctuations in agricultural product prices. Agricultural output values are also decreasing, while production costs, such as agricultural inputs, are increasing. Labor scarcity, rising wages and loss of farming jobs could lead to changes to cropping patterns, and political and economic issues, such as trade agreements, exchange rate changes and export policies, also affect agricultural production and agrochemical trade. More new players in the agrochemical market lead to oversupply, in terms of both quantity or quality and price wars, affecting domestic production. The future vision of the agricultural sector is also not very clear," said Mohamed Arkoub, Marketing and Development manager (Egypt & Export countries) at Chema Industries.
Hamada also explained that the Egyptian pesticide industry is facing the issue of counterfeit products, while illegal pesticides account for around 20% of total pesticide consumption. The Egyptian government is working hard to combat the trade in illegal pesticides, and the situation has improved in recent years.
North Africa market outlook
In conclusion, the export market is the center of the noticed evolution and will force the producer to seek less toxic and less residual pesticides (having a PHI of less than three days). In this context, the future of biopesticides is more promising.
Company profile
North Africa market outlook
Although the agrochemical market in North Africa is in the ascendant, various positive factors have determined that the development prospects of this market are promising.
• The implementation of new large national or international projects for production, thanks to the workforce and the availability of technicians with a very remarkable level of experience.
• The continuous conversion of the operating system for local markets to high value-added projects for export destinations.
• Agricultural development plans implemented by governments provide a strategy for 2030. This is an example of Morocco's green Morocco plan and the plan for local products in Tunisia.
In conclusion, the export market is the center of the noticed evolution and will force the producer to seek less toxic and less residual pesticides (having a PHI of less than three days). In this context, the future of biopesticides is more promising.
 | CAM FOR AGROCHEMICALS was founded in the year 1998 and is a leading company in the field of manufacturing and marketing agriculture pesticides, and plant growth regulators. The headquarters is in Cairo – Egypt and the factory is located in New Nubaria City. One of the first aspirations of the company was to supply the Egyptian market with high quality products that meet the requirements of the Egyptian market. Tel: +20237622023 Website: www.camagro.net |
 | StarChem Industrial Chemicals is the subsidiary of Shoura Group, which is a company with 58 years of experience in the agriculture field. It is the leading agrochemicals company in Egypt. It is currently the primary distributor and representative of leading multi-national agrochemical companies dealing in more than 200 products, namely, pesticides, fertilizers, industrial chemicals, and growth regulators. Honoring its slogan, "the farmer's partner", the company’s sole mission is to reach every farmer in Egypt and serve them with the best knowledge and support. Tel: +2035393111222 Website: www.shourainternational.com |
 | Chema Industries established its factory in 1995 to formulate and repack agrochemical and public health products. The factory has 9001-14001–18001 ISO certificates. Chema own some 154 pesticide and fertilizer products. Chema has expanded its business to many countries, including Egypt, Morroco, Kenya, Nigeria, Ethiopia, KSA, Oman, Sudan and Yemen. Tel: +2 01003351411 Website: www.chema.com.eg |
If you are an information expert who is familiar with Africa agrochemical market, or you have an agrochemical company in this region and you are interested in sharing your own story, please feel free to contact AgroPages.
Christina Xie
+86 571 87240039
This article was initially published in AgroPages '2019 Market Insight' magazine. Download the PDF version of the magazine to read more articles.
Source: AgroNews
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