Econometric Analysis of the Cane Sugar industry determinants in Egypt

Abstract

Sugar is an industrial agricultural commodity of strategic importance at the global level. At the local level, the sugar industry from the cultivation of sugar cane is considered an ancient industry that was supplemented by the manufacture of beets and the extraction of sugar from it. The research problem was represented in the existence of a sugar food gap estimated at 875.8 thousand tons of sugar as an annual average for the period (2000-2018). To fill this gap, the state imports sugar from abroad to meet the deficit. It is aimed study the current situation of the sugar industry in Egypt by analyzing the food gap for it and raise the rate of self-sufficiency in sugar. Then, the study was concerned with estimating the variables affecting each of the area and quantity of supplied cane, as well as the supply price, and the efficiency of sugar extraction on the function of the operating efficiency of cane sugar manufacturing factories in the main governorates (Minya, Sohag, Qena, Luxor, and Aswan), during the average period (2016- 2018). Similarly, these variables affecting the aforementioned cane yield can be estimated on the function of the amount of sugar produced/ operating day of the cane sugar factories in the governorates of Egypt during the same period, using the Panel Data analysis. The most important results of the study revealed the following:1-The results show that the variable 𝑙𝑛 𝑥10𝑡 that expresses the average price of supplying a ton of cane during the study period is significant and has a negative sign, as shown in the model estimating the equation of the operational efficiency ratio, as an increase in the average price of supplying a ton of cane by 10% will lead to The operational efficiency decreased at a rate of about 3.11%. 2- It is also evident from the results of the model estimating the equation of the amount of sugar produced for one working day that the variable 𝑙𝑛 𝑥6𝑡 that expresses the degree of sweetness of sugar produced from sugar manufacturing factories during the same period, it is significant and its sign is positive, as an increase in the degree of sugar sweetness by 1% will lead to an increase in quantities Sugar produced from manufacturing per day at a rate of about 19.6%. 3- It is clear from the measures of economic efficiency for the production of cane sugar, the relative superiority of farmers of the Arab Republic of Egypt during the period (2013-2018), which is attributed to the response of the farmers’ lands to the production elements used in them, due to the high degree of fertility of their lands, and the increase in the accumulated experiences of the farmers.