BUENOS AIRES, (Reuters) – Egypt could triple its trade with South American trade bloc Mercosur over the next few years as it pushes to secure food supplies, its trade minister said on Tuesday.
Egypt signed a free trade agreement on Monday with Mercosur, which groups agricultural exporters Argentina, Brazil, Uruguay and Paraguay.
“We have $2.5 billion of trade between Egypt and the Mercosur. With the free trade agreement we can double, or triple that number easily in the next few years,” Rachid Mohamed Rachid said in an interview.
Egypt imported $1 billion of Argentine goods in 2008, including soy beans, soy oil, corn and beef and sold goods worth $111 million to Argentina.
“Our population today is 80 million; we’ll go to 100 million in the next decade, so our consumption of food will increase and this is one of the reasons why we’re here because we want to partner and secure our source of food for the future,” Rachid said.
As a country that would like to secure at least 5 million tonnes of wheat a year, it is in Egypt’s interest to have a diversified base of supply, he added.
Egypt’s exports to Brazil, the largest economy in Latin America, totaled $218 million in 2008. Its imports, which include meat, sugar and aircraft, came to $1.4 billion, according to Egyptian Trade Ministry data.
Rachid said the deal is likely to boost Egyptian investment in South America and vice versa and could prompt other Arab countries to expand their trade with the region.
“It’s a very important new event, new link, new chapter in the relation between the Middle East and Latin American countries … I’m sure other (countries) will follow,” he said.
Rachid said Egypt also expects to start negotiations for a free trade agreement with Russia, a big supplier of grains to the country, in the next six months and with South Africa before the end of the year.
“We’re trying to expand our providers… and at the same time balance the risk of the existing markets,” he said.
Asked about plans to grant eight new cement licenses to boost output, Rachid said Egypt will issue the permits before the end of the year. But he added the government may not be able to supply energy to firms that obtain them.
Egypt aims to increase cement output by 40 percent to 80 million tonnes by 2015 to meet growing local demand.
“It can be part of the conditions that we will not be able to supply energy … which will mean that the companies will have to make their own deals, either with foreign companies operating in Egypt or importers,” he said.