Economic Analysis of the Supply Response of the Most Important Oil Crops in Egypt

Oil crops are considered important strategic crops as they are the main source of vegetable oils used in human food and essential industries, in addition to extracting oils from their seeds. The most important oil crops in Egypt are peanuts, sesame, soybeans, and sunflower. Despite the importance of the aforementioned crops in oil production for Egypt, the quantity of imported oils represents about 90% of the country's needs, even though it possesses the climatic, soil, and water resources suitable for producing most crops. Therefore, the state seeks to expand the cultivation of the most important oil crops.The research concluded that: the peanut crop ranks first in terms of relative importance among the four oilseed crops under study, representing about 53% of the area. It is followed in relative importance by the sesame crop, representing about 27%, then the soybean crop, representing about 10%, and lastly the sunflower crop, representing about 8%. It is noteworthy that there is a significant decrease in the contribution of both soybean and sunflower to the total area of oilseed crops, which aligns with the state's policy to increase the cultivated area of these crops according to Egypt's 2030 strategy.It also appears that the average domestic production of the four main oil crops is approximately 316 thousand tons, while the total consumption of these crops is around 1,869 thousand tons, with a self-sufficiency ratio of about 17% and a gap of approximately -1,553 thousand tons. It has been found that the most consumed crop is soybeans, followed by peanuts, then sesame, and sunflower, with respective consumption rates estimated at about 79%, 14%, 3%, and 3%. The average gap for each crop is approximately- 1,440, -61, -19, and - 33 thousand tons, respectively. This deficit and gap are covered through imports from abroad, highlighting the significant gap and shortfall in soybean production in particular.By studying the quantitative trade balance of peanuts, it was found that there was a surplus estimated at about 27 thousand tons during the average period (2003-2022), due to an increase in export quantities and a decrease in Egyptian import quantities as a result of the increased area planted with peanuts. Meanwhile, by studying the quantitative trade balance for each of sesame, soybeans, and sunflower, a deficit was found for each, estimated at about 10 thousand tons, 1,938 thousand tons, and 34 thousand tons, respectively. This is due to a decrease in export quantities and an increase in Egyptian import quantities as a result of the reduced planted area for each of them.The response of the cultivated area was estimated using the Mark Nerlove model during the period (2004-2023) for the area of the most important oil crops in Egypt. The most significant variable affecting the cultivated area in the current year for the crops under study was the farm price in the previous year, which influenced peanut, sesame, soybean, and sunflower crops by approximately 3%, 14%, 41%, and 135%, respectively, in the short term. It was found that the desired or target area in the long term for peanuts reached about 1.19 thousand feddans, representing approximately 0.01% of the actual crop area, and the actual level of planted area for peanuts is adjusted toward the desired level over two years. Meanwhile, the desired area for sesame was estimated to be about 11.16 thousand feddans, representing approximately 0.14% of the actual sesame area, and the actual level of planted area for sesame is adjusted toward the desired level over three years.While the desired area for soybean was estimated at approximately 4,000 acres, representing about 11% of the actual soybean area, the actual level of soybean-planted area is adjusted toward the desired level over two years. As for the desired area for sunflower, it amounted to approximately 4,430 acres, representing about 0.16% of the actual crop area, and it appears that the actual level of sunflower-planted area is adjusted toward the desired level over two years.