Egypt’s Dairy Fallout

Fri, 20 Nov 2020 02:23:16 GMT

It almost goes without saying the revolution is not good for business. But what’s happening in Egypt, at least so far, is not revolution but a market disruption.

“Egypt has been a buyer of cheese for years and years. It’s been a very good market for us,” says Tom Suber, president of the U.S. Dairy Export Corporation (USDEC). Year-to-date January through November 2010, Egypt imported $99 million worth of U.S. dairy products.

The Middle East and North Africa (which includes Egypt and Tunisia) have imported $319 million worth of U.S. dairy products, which is 108% of what they did in the same period in 2009. The entire region represents about 9% of U.S. dairy exports. Egypt alone represents roughly 3% of U.S. exports.

Disruption of the Egyptian market will also cause some problems for European and Oceania dairy exporters as well, who have long sold product into the North African nation. If it does, it could back up some amount of product globally.

A political disruption of markets generally mean those markets will stop buying out of fear that distribution to stores will be stopped or product confiscated by new political power brokers. But once the political situation calms down, orders usually return to normal.

That’s what happened in Thailand after its recent political turmoil, says Suber. But keep in mind the Thailand experience was not a revolution but a political re-structuring.

It remains to be seen how disruptive the Egyptian turmoil will be to markets. And, whether the revolutionary spirit spreads to other Middle East countries and further disrupts dairy trade flow.