중앙데일리

Egypt’s exports will fall sharply, Kotra says

Feb 07,2011
With the ongoing political crisis in Egypt, the Korea Trade-Investment Promotion Agency said yesterday that exports from Egypt could miss their mark this month by 80 percent. The agency estimates that of the $300 million in exports that had been forecasted, only goods worth $60 million will reach foreign shores.

Other services including banking and shipping are expected to be hit hard, along with the sentiment of buyers of Egyptian goods.

A recent survey by Kotra on 1,190 buyers from 68 countries showed that 95 percent of them felt that Korea will not be affected greatly from the political unrest in Egypt.

Many companies involved in trade with Egypt have a negative view on the situation as 28 percent of the buyers said the crisis in Egypt will affect their countries.

They said that some affected sectors included the financial sector, consumer market, corporate investments, and construction projects. Buyers from advanced countries are expecting limited damage in the short term, but said that if the situation continues for a long time, it could result in a rise in raw material costs and inflationary pressure that would affect their countries.

Local companies reported problems in exporting to Egypt. For example, Egypt-based Universal Part Co., which imports Korean automobile parts, has closed 99 percent of its branches and said additional imports will be impossible this month.

Korean companies could also face export problems to the rest of the Middle East and Africa because intra-regional trade with Egypt will be affected by the unrest.

Kotra said that Korean companies need to monitor the situation. In a worst-case scenario where all trade routes are cut to Egypt, Kotra said companies should act fast to find alternate markets. It added that since Egypt’s main export product of textiles may be suddenly stopped, companies need to contact other buyers for products in advance. “We have found that while Korean exports are unlikely to be affected in the short term, our companies should continue to take precautions and make adjustments accordingly,” said Kim Yong-suk, director of Kotra’s Middle East, Africa and CIS Team.


By Jung Seung-hyun [seungjung@joongang.co.kr]



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