Required Report - public distribution

**Date:** 7/27/2004

**GAIN Report Number:** EG4016

EG4016

**Egypt**

**Livestock and Products**

**Annual**

**2004**

**Approved by:**

![](media/image1.wmf)Asif J. Chaudhry

US Embassy

**Prepared by:**

Fred Giles & Sherif Ibrahim

**Report Highlights:**

Egyptian live imported cattle and frozen beef declined in 2003 due to
the continuing devaluation of the Egyptian pound. In 2004, beef liver
imports dropped to 5,000 MT from 33,000 MT in 2003, as a result of the
beef ban against U.S. suppliers.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Unscheduled Report

Cairo \[EG1\]

\[EG\]

Table of Contents

[**Production 3**](#production)

[Consumption 3](#consumption)

[Prices 4](#prices)

[Trade 4](#trade)

[PSDTable Cattle 6](#psdtable-cattle)

[Import Trade Matrix Animal Numbers
7](#import-trade-matrix-animal-numbers)

[PSD Table Meat 8](#psd-table-meat)

[Import Trade Matrix Meat 9](#import-trade-matrix-meat)

# 

# Production

Egypt's livestock sector has shown improvement in recent years despite a
dramatic decline in the importation of live cattle. The herd population
in 2003 increased slightly due to the continuing success of the National
Buffalo Project (NBP). The objective of this project is to fatten
buffalo calves to a live weight (LW) of 450-500 kilograms in order to
reduce reliance on importing live animals or frozen meat. In 2003, the
NBP accounted for about six percent of the total herd. It is estimated
that the total number is currently 340,000 heads. While most cow calves
are fattened up to 360-450 kg (LW), about 60 percent of buffalo calves
are slaughtered at 70-80 kilograms live weight for veal production. The
remainder is fattened up to 450 kg. The total number of animals
slaughtered for meat in 2003 is estimated at 1,990,000 heads, (656,700
cows and 1,333,300 buffaloes). Total meat production in 2003 is
estimated at 440,000 MT, and it is expected to increase to 453,000 in
2004 due to the growth in beef fattening operations and the decrease in
meat imports.

The major impediment to development of the livestock sector in Egypt is
the fragmented nature of the national herd. Approximately 90 percent of
all cattle and buffalo populations are held by small farmers, most of
whom own one to five animals. For the most part, these farmers have few
financial resources and an inadequate knowledge of animal breeding. The
land base in Egypt is small; therefore, farmers do not have the luxury
of permanent pastures. This means all animals must be maintained and fed
under confined conditions.

Herd improvement through artificial insemination is practiced on large
dairy farms, with farms mixing their own feed rations on site. The
rations consist of corn, cottonseed meal, wheat bran and farm
by-products (rice straw, rice hulls, bean straw, and barely straw),
molasses, limestone, and vitamins and salt. According to government feed
regulations, growth hormones are not permitted in the manufacture of
animal feed.

The lack of adequate packaging, sanitation, and quality control are some
of the problems that impact the efficiency of meat production in Egypt.
There are 355 slaughter houses in operation. Most of these are small
one-room operations, but there are eight industrial facilities located
in Cairo and Alexandria where about 40 percent of the slaughtering takes
place. Most slaughtering (50 percent of cattle and buffalo, 60 percent
of calves) takes place in farms or in villages, not in specialized
slaughter houses.

# Consumption

The consumption of red meat in Egypt is comprised mainly of
locally-produced fresh meat and imported frozen meat. Egyptians prefer
beef to other types of meat, including poultry and lamb. They also
prefer fresh over frozen beef. The poorest segments of the population
prefer to buy imported frozen meat because it is cheaper. On the other
hand, the more affluent consumers tend to think of imported frozen meat
as an inferior product. As a result, the consumption of imported meat
for this group tends to go down as incomes rise. The per capita
consumption of red meat is estimated at slightly over 8 kg/year, which
is quite low compared to consumption levels in other countries. The low
figure is mainly due to the high price of locally- produced meat and
continuing constraints on the importation of red meat for direct
consumption (e.g., the seven percent maximum fat limitation on imported
frozen meat).

Imported beef liver is positioned as a relatively cheap source of
protein. It is estimated that about 60 percent of imported livers are
sold by street vendors for sandwiches, while 40 percent is consumed at
home. Competition to beef livers comes from other sources of
comparatively cheap animal protein such as imported frozen fish and low
price beef cuts from Uruguay and Brazil and briskets from the European
Union. However, in December 2003, Egypt banned the importation of beef
and beef products including ruminants, due to the BSE case found in
Washington State. Several other countries placed an immediate ban on the
importation of U.S. beef products, including shipments already on the
water. This lead to trade disruption in several U.S. beef export
markets. The Office of Agricultural Affairs provided up-to date
information about the situation in the United States to Egyptian
regulators and convinced them to allow entry of U.S. beef products
already in transit. This action saved millions of dollars for U.S.
exporters. As a result of this ban, the wholesale price of imported beef
liver increased recently from LE 8 per kg to LE 15 per kg from South
American countries, and the retail price increased from LE 10 to LE
9/kg.

## Prices

##  

Locally produced buffalo meat currently (July 2004) sells at LE 22 per
kg in public sector stores (cooperatives). Prices in private sector
shops for locally-Produced meat vary between LE 27-38 per kg (regardless
of the type of meat (beef or buffalo). Prices of imported frozen beef
for processing (with maximum fat content of 20 percent) during May-June
2004, are reported at \$1,750 per MT/CIF for hindquarters, and \$1,500
per MT/CIF for forequarters as compared to \$1,700 per MT/CIF and
\$1,500 per MT/CIF respectively, for the same period last year. The
importation of Indian buffalo meat is banned by the Ministry of
Agriculture due to frequent SPS violations. Imported frozen beef from
South American countries currently retails at between LE 15 and LE 17
per kilogram. Imported frozen beef liver from Argentina and Brazil is
currently imported at \$950 per MT/CIF and retails at LE 18-19 per kg,
compared to LE 35 per kg for fresh liver.

## 

# Trade

With restrictions still in place for most European countries due to BSE
and FMD, the devaluation of the Egyptian pound, and the severe shortage
of foreign exchange live imported cattle have become uncompetitive with
local production. From Australia alone, total beef cattle imports, total
beef cattle imports were 5,000 heads in 2003, compared to 153,000 heads
in 2002.

For the first half of 2004, no beef cattle imports occurred. Imports of
beef cattle are expected to remain the same through out the year. The
same applies to dairy cattle. No dairy cattle imports occurred during
2003 or the first half of 2004. Until June 2001, U.S. dairy cattle
imports were affected by the MOA Decree \# 1355/1998, which requires
imported cattle must to be from a country or area declared as Unexotic
Bovine Leukosis (EBL) free. Since the United States is not declared as
EBL free, importation of U.S. dairy cattle into Egypt was effectively
banned. However, as a result of joint efforts between the U.S. industry
officials, importers, FAS Cairo, and APHIS, the Egyptian government
decided to allow the importation of breeding cattle come from bios cured
farms under the supervision of Egyptian veterinary authorities. To date,
no dairy cattle imports from the United States have taken place due to
cost constraints. Egyptian dairy farmers continue to favor U.S. dairy
cattle for their higher milk production (27 kg/day in their first
lactation) compared with 16 kg/day for cattle from other sources. The
high prices of U.S. dairy cattle are currently \$3,000 CIF for non
registered and \$3,300 CIF for registered cattle. This is almost double
the landed price for Australian dairy cattle. The occurrence of BSE in
the United States has forced importers to seek alternative sources.

Egyptian imports of frozen beef in 2003 declined to an estimated 93,000
MT, compared to 107,792 MT in 2002. This decline was due to the
continuing devaluation of the Egyptian pound which made imports more
expensive. Brazil and Argentina continue to be the major suppliers of
imported frozen meat to Egypt. Meat processing facilities that rely on
imported frozen imports continue to run short on supply. Industry
sources indicate that 40 percent of these facilities have closed and the
remaining facilities are operating at about 50 percent of their
capacity.

Currently, the United States is not a major beef supplier to Egypt. This
is due to lack of price competitiveness, and also a government imposed
restriction that fat content be no more than seven percent on imported
beef for direct consumption. U.S. beef exports to Egypt are limited to
high quality cuts with extra trimming mostly for tourist facilities and
hotels. Egypt usually imports about 1,000 MT of high quality beef from
the United States every year.

In 2003, Egypt's total beef liver imports declined to an estimated
32,728 MT practically unchanged from 2002 levels. The United States was
the sole supplier in 2003. However, in 2004 imports of beef liver
dropped to 5,000 MT, (all coming from Brazil and Argentina) due to the
beef ban against U.S. suppliers.

## PSDTable Cattle 

## 

  ---------------------- ------------ ------------- -------- ------------- ----- -------------
  **PSD Table**                                                                  

  **Country:**           Egypt                                                   

  **Commodity:**         **Cattle**                                              

                                      **2003**               **2004**            **2005**

                         Old          New           Old      New           Old   New

  **Calendar Year                     **01/2003**            **01/2004**         **01/2005**
  Begin**                                                                        

  Total Cattle Beg. Stks 6400         6400          6438     6440          0     6319

  Dairy Cows Beg. Stocks 4160         4170          4180     4186          0     4190

  Beef Cows Beg. Stocks  0            0             0        0             0     0

  Production (Calf Crop) 2200         2205          2215     2217          0     2220

  Intra EC Imports       0            0             0        0             0     0

  Other Imports          100          5             100      0             0     50

  TOTAL Imports          100          5             100      0             0     50

  **TOTAL SUPPLY**       8700         **8610**      8753     **8657**      0     **8589**

  Intra EC Exports       0            0             0        0             0     0

  Other Exports          0            0             0        0             0     0

  TOTAL Exports          0            0             0        0             0     0

  Cow Slaughter          528          530           540      528           0     530

  Calf Slaughter         154          160           155      170           0     175

  Other Slaughter        1280         1300          1358     1360          0     1365

  Total Slaughter        1962         1990          2053     2058          0     2070

  Loss                   300          280           300      280           0     270

  Ending Inventories     6438         6340          6400     6319          0     6249

  **TOTAL DISTRIBUTION** 8700         **8610**      8753     **8657**      0     **8589**

  Calendar Yr. Imp. from 0            0             0        0             0     0
  U.S.                                                                           

  Calendar Yr. Exp. to   0            0             0        0             0     0
  U.S.                                                                           
  ---------------------- ------------ ------------- -------- ------------- ----- -------------

## 

# Import Trade Matrix Animal Numbers 

# 

  ---------------------- ------------ ------------ ------------- -------------
  **Import Trade                      **Animal                   
  Matrix**                            Numbers**                  

  **Country:**           **Egypt**                 Units:        1000 MT CWE

  **Commodity:**         **Cattle**                Partial       Jan
                                                   Begin:        

                                                   Partial End:  May

  **Exports for**        **2002**     **2003**     **2003**      **2004**

                         **Full**     **Full**     **Partial**   **Partial**

  U.S.                                                           

  Others                                                         

  Australia              152,870      5,000        3,000         0

  Germany                                                        

  Romania                                                        

  Italy                                                          

  Hungary                                                        

  Ukrania                                                        

  Poland                                                         

  Portugal                                                       

  Indonesia                                                      

                                                                 

  **Total for Others**   152870       5000         3000          0

  **Others not listed**                                          

  **Grand Total**        152870       5000         3000          0
  ---------------------- ------------ ------------ ------------- -------------

## 

## PSD Table Meat 

## 

  ----------------------- ------------ ------------- ------- ------------- --------------- -------------
  **PSD Table**                                                                            

  **Country:**            **Egypt**                                        \<-Conversion   
                                                                           factor for CWE  

  **Commodity:**          **Cattle**                                                       

                                       **2003**              **2004**                      **2005**

                          Old          New           Old     New           Old             New

  **Calendar Year Begin**              **01/2002**           **01/2003**                   **01/2004**

  Slaughter (Reference)   1962         1990          2053    2056          0               2070

  Beginning Stocks        0            0             0       0             0               0

  Production              432          440           452     453           0               455

  Intra EC Imports        0            0             0       0             0               0

  Other Imports           70           93            75      70            0               75

  TOTAL Imports           70           93            75      70            0               75

  **TOTAL SUPPLY**        502          533           527     523           0               530

  Intra EC Exports        0            0             0       0             0               0

  Other Exports           0            0             0       0             0               0

  TOTAL Exports           0            0             0       0             0               0

  Human Dom. Consumption  502          533           527     523           0               530

  Other Use, Losses       0            0             0       0             0               0

  TOTAL Dom. Consumption  502          533           527     523           0               530

  Ending Stocks           0            0             0       0             0               0

  **TOTAL DISTRIBUTION**  502          **533**       527     **523**       0               **530**

  Calendar Yr. Imp. from  0            0             0       0             0               0
  U.S.                                                                                     

  Calendar Yr. Exp. to    0            0             0       0             0               0
  U.S.                                                                                     

                                                                                           
  ----------------------- ------------ ------------- ------- ------------- --------------- -------------

# Import Trade Matrix Meat

# 

  ---------------------- ------------ ------------ ------------- -------------
  **Import Trade                      **Meat**                   
  Matrix**                                                       

  **Country:**           **Egypt**                 Units:        MTCWE

  **Commodity:**         **Cattle**                Partial       Jan
                                                   Begin:        

                                                   Partial End:  May

  **Exports for**        **2002**     **2003**     **2003**      **2004**

                         **Full**     **Full**     **Partial**   **Partial**

  U.S.                                1,070                      

  Others                                                         

  Ireland                                                        

  Uragway                3,530                                   30,000

  Netherlands                                                    

                                                                 

                                                                 

  India                  32,847                                  

  Brazil                 44,311       80,877       50,369        5,000

                                                                 

  China                  21,963                                  

  Argantina                           9,042        3,253         

  **Total for Others**   102651       89919        53622         35000

  **Others not listed**  5,321        2,011        4,854         

  **Grand Total**        107972       93000        58476         35000
  ---------------------- ------------ ------------ ------------- -------------