Loading...
Agriculture Commodities and Egypt’s Chronic Deficit Position: The Role of Commodity Hedge Tools
Abdul Latif Jameel Hall– Room 1055
AUC Avenue, P.O. Box 74, New Cairo, 11835, Egypt
Details
Egypt, a country of 100+ million inhabitants, is the world’s top wheat importer, 4th in corn (maize), and is 95 percent dependent on imported vegetable oils. The total bill for these items in 2021 reached 13 billion USD, representing a staggering 35 percent of Egypt’s external deficit on goods and services recorded at 37 billion USD. This bill is estimated to reach 17 billion USD in the 2022 calendar year.
Unfortunately, most of Egypt’s procurement is a flat price, i.e., without any hedging mechanisms to protect against price fluctuations. This puts the country at significant risk vis-à-vis price volatility.
Horizontal and vertical expansion in agriculture has always been the announced target of successive governments without noticeable breakthroughs. Risks associated with agriculture place it at the highest of the spectrum compared to any asset class; however, hedging tools provide reasonable grounds for de-risking vis-à-vis investors and financial institutions.
In this presentation, the speaker will go through risk management tools, i.e., Hedging Tools (Futures/Options/Derivatives) that are used globally to hedge (de-risk) agriculture commodities and the benefits Egypt could enjoy when employing them.
Speakers
Islam Salem
founder and managing partner
The Risk Manager, and board member of Eastern Company
Islam Salem is a veteran commodity trader, risk manager and C/board level executive. He is founder and managing partner, The Risk Manager, and board member of Eastern Company. He was among the first team to start-up Cargill's business in Egypt. During his 20-year Cargill journey he, along with his peers, took the business to the forefront of the Egyptian market and lead the establishment of a multi-hundred million USD commodity processing and port logistics investment platform.
In 2012 he joined a group of investors to establish a USD one billion investment in the agro-industrial space. It received USD 700 million long term debt and various awards and is a case study in COP27.
He is an active member in several business organizations and think tanks.
Islam has an BA in Economics from the American University in Cairo and an MBA in International Trade from Maastricht School of Management, the Netherlands.