Egypt’s pressure on the potato markets fueled by the sharp devaluation of pound

Published 2024년 4월 5일

Tridge summary

On March 6, 2024, Egypt witnessed a significant economic event as its government allowed the Egyptian pound to freely fluctuate, leading to a 61% devaluation against the US dollar in just one day, and marking a more than three-fold depreciation over the past two years. This drastic devaluation occurred during the peak season for potato exports, a crucial export crop for Egypt, at a time when Europe is experiencing record high potato prices. The devaluation has positioned Egyptian potatoes as more competitive in the international market, potentially mitigating the potato shortage in Europe and averting further price hikes. Despite being one of the top 5 global potato exporters, Egypt faces challenges such as Houthi terror in the Red Sea but continues to be a vital supplier to the EU, Russia, and several Middle Eastern countries.

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Original content

On March 6, 2024, the Egyptian government let the official exchange rate of the local currency freely fluctuate, which led to an increase in the US dollar value against the Egyptian pound by more than 61% in just one day. Overall, in the past two years Egyptian currency has depreciated more than three-fold. The devaluation coincided with the season of active potato exports from Egypt. Since potatoes are one of the country’s main export crops, and in Europe potato prices are breaking all records, the devaluation for this market came just at the right time. This allowed for some reduction of the tense situation with potato shortage and prevented further price increases for now. Egypt is one of the top 5 largest global potato exporters, supplying these products to a large number of countries around the world. The main markets for Egyptian potatoes are Russia, the European Union, the UAE, Lebanon, Iraq, Kuwait, ...

Source: Argenpapa