Tuesday, March 2, 2021

The liberation of the Sudanese pound puts pressure on Egyptian exports to “Khartoum”

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Building materials: The impact on the sector will be limited

Engineering Industries: studying the changes that may occur and the mechanism of dealing with them

Furniture: Currency liberalization provides an opportunity for future expansion

 

Export sectors feared a decline in exports to Sudan in the short term; As a result of liberalizing the Sudanese pound against the dollar, which will naturally affect the decline in consumption and the import bill for Khartoum, they saw an opportunity for expansion after a period of time passed since the decision and the stability of the situation.

Farouk Mustafa, the representative of the Export Council of Building Materials and Refractories, said that liberalizing the price of the Sudanese pound will have a limited impact on the volume of the sector’s exports to the Sudanese market.

He explained that the liberalization of the currency would reduce the value of its imports, but the nature of building materials products and their consideration of basic commodities would make them limited damage from this decision, and then to Egyptian exports to it of building materials.

Last Sunday, the Central Bank of Sudan decided to reduce the value of the local currency (the Sudanese pound) against the dollar, and revealed a new system to unify the exchange rate between the official and parallel markets.

According to a statement by the Sudanese Central Bank, the decision to reduce the selling price of the Sudanese pound against the dollar from 55 Sudanese pounds to 393.75 Sudanese pounds in the banking system.

Mustafa told Al-Borsa that Sudan is a major market for building materials exports, and ranked eighth in the list of the largest importers of building materials from Egypt, with a value of $ 128 million in 2020 compared to $ 116 million in 2019, a growth rate of 11%.

Hazem Bishr, a member of the Chemical Industries and Fertilizers Export Council, said that the consequences and impact of this decision will not appear immediately, but it will take some time.

He pointed out that financial dealings with banks in providing dollars in Sudan had been almost stopped during the recent period, and the results of this decision would be governed by the extent of the availability of dollars in banks after the process of liberalization of the Sudanese pound against the dollar.

He explained that the floatation of the Sudanese pound will reduce the volume of demand in the Sudanese market, but this is still only an expectation.

Engineer Sherif Al-Sayyad, Chairman of the Engineering Industries Export Council, said that the Sudanese market is one of the most important markets for exports of the sector in Africa, especially for household appliances and tableware.

He explained that the council is currently conducting a study on the impact of the decision on the sector’s exports to Sudan, and the mechanisms that will be followed during the coming period in the event of a decline in demand there with liberalization of the local currency.

He indicated that the changes occurring in the region and the outbreak of the Coronavirus have created flexibility in dealing with changes, whether in innovating new methods of marketing, or expanding into other markets to compensate for the decline in demand.

Walid Abdel Halim, a member of the Furniture Export Council, said that the decision at the present time will have a limited impact on the decline in demand, especially since the Sudanese importers are procuring the currency at a price close to that announced by the Central Bank of Sudan.

He indicated that in the long term, the opportunity for Egyptian exports to expand in Sudan will be greater. With stability and economic recovery after a period of decision.
He explained that Sudan is among the top 10 markets for importing furniture from Egypt, and this market is indispensable.

Hani Badr El-Din, Chairman of the Board of Directors of Badr El-Din Farms Company, expected a limited impact of the decision, especially that importers were relying on procuring their needs from the black market at a price close to its current rate in banks after its liberalization.

He pointed out that exports would have declined and a shock would have occurred to them if importers had relied on managing their dollar needs from banks, and even then things would return to normal after a while and the opportunity would be good for expansion.

Egypt’s exports of food commodities to Sudan during the past year amounted to $ 69 million, and an increase of $ 30 million in exports compared to 2019.

The article, liberalizing the Sudanese pound, puts pressure on Egyptian exports to “Khartoum”. It was written in Al-Borsa newspaper.

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