8

# **Box 2**

# **Secular Changes in the Composition of Egyptian Exports: 1965 to 1992**

Historically, major changes have occurred in the commodity structure of Egypt's exports with a key factor being the increase in the importance of petroleum and petroleum based products.' Also, the volatility in international prices of energy goods has been a major factor causing the sizeable year-to-year changes of petroleum and other groups shares in total exports. For example, in 1980-82 mineral fuels accounted for about 65 percent of total exports, but by the early 1990s the share had fallen to about 44 percent. According to UNCTAD (1992, Table 2.7) crude petroleum prices fell by approximately 40 percent over the decade.

||||Produ|ct Group as|a Percentage of T|otal Egypti|an Exports<br>of w|hich:|
|---|---|---|---|---|---|---|---|---|
|Year|Total<br>Exports<br>($ million)|All<br>Foods|Agricul-<br>tural<br>Material|Fuels|Ores & Non-<br>Ferrous<br>Metals|All<br>Mfgs.|Textiles|Clothing|
|1965-67|591,695|16.7|54.5|5.4|1.6|21.6|16.1|0.4|
|1970-72|792,066|18.2|48.5|4.1|0.4|28.7|17.9|1.8|
|1975-77|1,543,977|18.6|32.1|20.0|1.5|27.7|15.3|3.4|
|1980-82|3,132,778|7.1|15.1|65.0|3.5|9.2|6.7|0.6|
|1985-87|2,029,883|8.0|13.0|51.2|6.0|21.8|16.7|1.3|
|1990-92|3,108,179|9.5|4.7|43.8|6.4|35.5|15.6|5.2|

Note: 1992 Major Export Items in Each Group and Share of Group Total (i) Foods -- Fresh Vegetables (SITC 054) - 28%; Rice (SITC 042) - 17%; (ii) Agricultural Materials -- Cotton (SITC 263) - 56%; Crude Vegetable Material (SITC 292) - 30% (iii) Fuels -- Crude Petroleum (SITC 331) - 87% (iv) Ores and Nonferrous Metals -- Aluminum (SITC 684) - 90% (v) Manufactures -- Textile Yarn (SITC 651) - 23%; Clothing (SITC 841) - 15% An important change also occurred in the relative importance of agricultural raw materials in Egypt's exports -- the share of these goods fell from about 55 percent in the mid-1960s to under 5 percent today. Cotton was the major product accounting for this decline as the value of cotton exports in 1992 ($53 million was about six times lower than in 1965 $337 million). Part of the decline is accounted for by further local processing of domestically produced cotton into yams, textiles and clothing, although Egyptian cotton became more and more disadvantaged in terms of competing international prices.

Increased aluminum exports account for almost all of the change in the ores, minerals and nonferrous metals group. The share of manufactures in Egypt's exports increased by approximately 14 percentage points over the period with textile yarn, clothing, iron and steel prnducts, and manufactured fertilizers accounting for much of the increase.

Although the share of foods in Egypt's total exports declined by about 7 percentage points (to 9.5 percent) several products within this sector (cereal preparations, fresh meat, fresh fish) recorded growth rates that were among the highest for any three-digit SITC product group (see Table 6). Since increased agricultural production and exports could help alleviate rural poverty special attention should focus on the removal of foreign trade barriers facing these goods.

'Egypt has departed from established UN practices and does not include petroleum produced and exported by foreign firms in its official trade statistics. Exclusion of these shipments causes Egypt's annual exports to be underreported by some $1 to $1.5 billion.