Dr. Mustafa Madbouly, the head of Egypt’s Council of Ministers, has been urged by onion exporters to intervene and resolve the ongoing crisis surrounding the suspension of Egyptian onion exports to Saudi Arabia. This request arose after it became evident that efforts to understand the reasons for the halt in exports had yet to bear fruit. After a recent report in the media, officials from the Ministry of Investment and Foreign Trade contacted some onion exporters to discuss the situation, but no concrete actions have transpired thus far.
Exporters have been anxiously waiting for the Ministries of Agriculture and Foreign Trade to take action to reopen the Saudi market, especially with increased red onion production expected in April, which could provide a significant boost for many exporters. Historically, Saudi Arabia represents a critical market for Egyptian onions, accounting for between 50% to 70% of all onion exports from Egypt.
The suspension of exports has persisted since May 2024, effectively hindering trade for nearly ten months. Surprising to many, however, is that no official announcement has been made by Saudi authorities to halt the shipments, despite the exports being completely stopped. The initial trigger for the ongoing crisis traces back to 2023 when Egypt imposed a temporary ban on its own onion exports, a decision that lasted six months from October 2023 to March 2024.
Following those restrictions, the Saudi market reopened briefly in April 2024, but it was short-lived. Exporters were shocked to face another closure that commenced in May 2024, which has continued without explanation. Reports during the first wave of suspension cited issues related to a malfunctioning Saudi platform for registering importation data, but no reasons have been communicated for the latest suspension.
The frustration among exporters has intensified, especially as the ban on Egyptian onions remains in place, despite the influx of Yemeni onions into the Saudi market—a deeply concerning issue for many in the Egyptian agricultural sector. Compounding the issue is the noticeable silence and inaction from Egyptian officials, including the Ministries of Agriculture and Foreign Trade, despite numerous appeals from onion exporters for intervention and clarity regarding the situation.
Onions form one of Egypt’s most important agricultural exports, ranking alongside citrus and potatoes. Exporters contend that resolving this issue is vital not only for their businesses but for the overall agricultural economy, which has seen onion exports plummet this year from an estimated 700,000 tons to merely 200,000 tons due to the crisis. The downward trend signifies stress within the industry and a need for corrective measures.
Simultaneously, a different but related concern arose in Jordan, where the head of the Zarqa Chamber of Industry, Engineer Fares Hamouda, highlighted a critical state within the poultry and egg production sector. He revealed that Jordan's food agricultural industries had shifted from simply meeting local market needs to achieving complete self-sufficiency. Yet, this progress brings its own challenges, with a surplus in production leading to a stark drop in poultry and egg prices—decreasing by 35% and 50% respectively.
Hamouda expressed the urgent need to explore export markets for poultry and eggs to absorb this surplus, particularly with Ramadan approaching. Importantly, he emphasized the role of the Ministry of Agriculture in facilitating the resumption of exports that had been halted in anticipation of the holy month. The expansive decrease in local demand has pressured prices and could benefit from export opportunities. Hamouda believes that opening export channels can mitigate financial losses faced by growers and contribute positively to the local economy.
On another note, the Saudi Export-Import Bank has announced that it has reached a significant milestone after five years of operation, revealing that it has extended credit facilities totaling approximately 67 billion riyals to support non-oil exports. Established on February 18, 2020, the bank aims to bolster the non-oil sector's contribution to the national economy. It has actively pursued over 70 international agreements to facilitate access to global markets for Saudi products and services and has successfully enabled Saudi non-oil exports to reach 150 markets worldwide.
The bank has also earned a prestigious reputation, having received 13 awards for its contributions to enhancing the Saudi economy. Committed to its vision for economic development, the Saudi Export-Import Bank continues to emphasize the importance of reducing export risks and improving financing availability to further enhance the competitiveness of Saudi exports.
As various sectors within the Middle East navigate these challenges, clarity and proactive measures from governmental institutions could prove crucial for exporters in both Egypt and Jordan, as they strive to maintain their footholds in regional and global markets.
