Egypt as a foreign trade partner of the Russian Federation

Russian products are actively distributed in the Egyptian market

In recent years, foreign trade volumes between Russia and Egypt have been growing rapidly. This is facilitated by the reorientation of Russian export and import priorities under the changed global trade conditions, as well as the relative proximity of the countries in terms of maritime logistics – a direct voyage from Novorossiysk to Alexandria takes no more than 5 days. As a result, an increasing number of domestic companies are developing business in this direction, while reciprocal import flows are also increasing.

Import-Export Supplies between Russia and Egypt

Egypt is the most populous country in the Arab world, which, thanks to its unique geographical position at the crossroads of Africa and Asia, plays an important political, economic, and cultural role in the MENA macro-region. The strategic importance of Egypt is largely determined by the presence of the Suez Canal as one of the most important arteries of global sea routes.

In terms of gross domestic product, Egypt ranks first in Africa and is among the 30 largest national economies in the world. However, nominal GDP per capita is approximately 4.5 thousand US dollars per year, which is a relatively low indicator and reflects a high level of poverty in the country.

The main specialized sectors of the Egyptian economy include tourism (thanks to resort areas on the Red Sea coast and unique historical heritage), transport (an important transit role based on the operation of the Suez Canal), agriculture (fruit and berry crops and cotton are important export items, while there is a dependence on grain imports). Also, the fuel and energy sector is fairly developed in Egypt, primarily natural gas production, which is, among other things, exported; there is also petroleum products production. Large volumes of cotton cultivation ensure the development of the textile industry.

After World War II, close economic and military-political ties were established between the USSR and Egypt; trade was mainly conducted on a barter basis, and the main items of Soviet imports were cotton, textiles, and some types of agricultural products. Several large industrial projects in metallurgy and energy were implemented. Starting from the 1970s, relations deteriorated and trade volumes declined sharply.

Currently, trade between the countries is based on market principles and the exchange of products from key specialized sectors of the states. At the same time, large-scale investment projects in the field of energy and infrastructure are being implemented.

In 2024, Egypt's import volume amounted to 94.7 billion US dollars, while exports equaled 44.8 billion US dollars, reflecting a strong imbalance in commodity flows and a significant negative balance of foreign trade. Under such conditions, Egyptian companies face a shortage of currency for international settlements; accordingly, there is increased interest in reciprocal import-export transactions, as well as barter settlements.

The main items of Egyptian imports are petroleum products (17.0 billion US dollars), engineering products (7.2 billion US dollars), grains (6.8 billion US dollars), electrical equipment (6.2 billion US dollars), and ferrous metallurgy products (5.2 billion US dollars). Together, these five aggregated items account for approximately 45% of the country's total import volume (which is equivalent to the entire export volume).

Egypt's key partner in international trade is China – 15.5 billion US dollars or 16% of total imports. The second is Saudi Arabia – 7.9 billion US dollars (8%), slightly behind it are the USA – 7.6 billion US dollars (8%). The fourth place is occupied by the Russian Federation – 6.0 billion US dollars in 2024 or 6% of Egypt's total import volume.

Egypt's trade balance with Russia is -5.4 billion US dollars, indicating the demand for activating export commodity flows to Russia to equalize the disproportion affecting not only settlements but also the organization of logistics schemes.

Approximately half of the supply volume from Russia to Egypt consists of grains (3.1 billion US dollars), dominated by wheat. The second import item is iron and steel (1.0 billion US dollars), including semi-finished products, sheet metal, rolled bars, and wire. In third place are fats and oils (0.5 billion US dollars): 88% is sunflower oil, the remaining volume is soybean oil. These are followed by articles of iron or steel (0.4 billion US dollars), wood (0.3 billion US dollars). Copper and copper articles, electrical equipment, plastics, legumes, fertilizers, and a number of other less significant products also flow from Russia to Egypt.

In the opposite direction go fruits and nuts (0.4 billion US dollars): citrus fruits, grapes, dates, and others; vegetables (0.1 billion US dollars): half of the volume is potatoes, also in significant quantities, the Russian market receives frozen ready-made vegetables, fresh onions, carrots, tomatoes, Jerusalem artichokes.

From the provided data, it is clear that despite the achieved fairly high level of exports to Egypt (overall fourth place among all countries in the world), there remain many opportunities for domestic companies both in developing sales of Russian products traditional for Egyptian imports and in entering new niches currently occupied by companies from other countries. As for Egyptian exports, Russian importers still make rather weak use of the existing opportunities, including in importing key Egyptian export products. This is largely due to a number of objective difficulties in working with Egyptian companies and the lack of necessary competencies to build long-term mutually beneficial cooperation formats. How to overcome the existing market barriers of Egypt and develop foreign trade activities will be discussed below.

Finding Partners in Egypt: Potential Buyers and Suppliers

It is necessary to start by noting that the Egyptian market can be considered quite traditional. Decisions are often made in personal communications, and information on market conditions is poorly formalized and difficult to "see through" from abroad. All this causes serious difficulties in finding potential partners for doing business, creating barriers within the framework of conducting marketing research to understand the principles and parameters of functioning of individual commodity markets.

Nevertheless, desk analysis of a certain depth is still possible.

First of all, attention should be paid to the website of the Central Agency for Public Mobilization and Statistics CAPMAS (https://www.capmas.gov.eg/), which provides a significant amount of statistical information. Most of it is publicly available in Arabic and English; more detailed reports and in-depth analytics may be provided separately for a fee.

For example, on the CAPMAS website, one can familiarize themselves with data on current prices for key types of products, which allows for more accurate formulation of a commercial offer for potential partners.

The portal of the Egyptian Ministry of Trade and Industry (https://mti.gov.eg/) can serve as a source of information on current news of domestic market development, ongoing large-scale projects, product requirements and standards. It also contains documents defining state industrial and trade policy, development strategies for key industries.

One can become more familiar with the directions and results of investment policy on the website of the General Authority for Investment and Free Zones of Egypt (https://www.gafi.gov.eg/). It is of particular interest for companies considering Egypt as a country for investment and exploring options for establishing joint ventures or opening branches.

To track current information on the situation in specific commodity markets in Egypt, including the entry of new companies and products, the launch of investment projects, and changes in state regulation, it is recommended to use local business analytics resources, for example, Daily News Egypt (https://dailynewsegypt.com/) or Ahram Online (Business section) (https://english.ahram.org.eg/).

As electronic platforms for partner search, it is better to use global specialized resources containing large databases of companies. Getting acquainted with decision-makers is possible through business social networks, where representatives of large Egyptian enterprises are often registered.

Egyptian business culture is largely oriented toward personal communications, as well as recognizing the importance of acquaintances, references from other partners, or at least representatives of local companies. Therefore, exhibition events can be of great importance; many of them in Egypt are distinguished by their large scale and importance for all countries in the MENA region. Cairo has a large international exhibition center hosting several events monthly. Among the largest international exhibitions held in Cairo are Food Africa, Egyptian Petrochemicals Conference, Cairo ICT, and others. By studying exhibition websites and releases from past events, one can not only get an idea of the main priorities of market supply and product range but also form a cold list of the most active local companies, as well as study competitors from other countries promoting their solutions in Egypt. However, more effective for entering the Egyptian market are not methods of working with cold contacts, but direct communications at business events.

Off-site Events in Egypt and Conducting Negotiations

Egyptian business culture has been shaped by several factors. The main ones include Islamic traditions of doing business and the legacy of the colonial era, primarily the period of the British protectorate in overt and covert forms. At the same time, Egyptian culture is one of the oldest on Earth, which many members of society are very proud of. One can often hear from locals that despite Islam and the Arabic language (although many, especially those working with foreigners, have a good command of English), they do not associate themselves with Arabs but consider themselves specifically Egyptians as bearers of a special culture. Such a combination of diverse factors has significantly influenced business culture and accepted norms of communication, although it is necessary to recognize the dominant force of Islamic traditions in modern Egypt.

In general, Egyptian society is characterized by hierarchy; decisions are made by more senior and older members of organizations, both in the public sector and in commerce. Personal relationships are extremely important; the main criterion for choosing whom to do business with is whether the person is proven or new to the market. With such distrust of new people, especially foreigners, recommendations from influential individuals acting as a kind of reputational guarantor can help. In the Egyptian business environment and society in general, the concept of "wasta" is widespread, which in Russian corresponds more to the term "blat" (connections). Without wasta, entering any market becomes problematic.

Consequently, online negotiations with Egyptian business are possible, but their effectiveness is high only at the stage of acquaintance and determining initial interest. Reaching a deal, especially one significant for the Egyptian partner, within their framework will be quite problematic. To reach final agreements, it is important to communicate in person, sometimes in a private setting; therefore, for successful entry into the Egyptian market and developing sales there, it is recommended to visit the country.

As noted above, Cairo has a huge international exhibition center where exhibitions are regularly held, attended by buyers from many African countries, especially North Africa, and Egypt, in particular. International exhibitions are extremely important for such a traditional business environment as Egypt's, so they are distinguished by good attendance and fairly high effectiveness in terms of sales.

An alternative option can be business missions, either individually or organized for several participants. The second option is often preferable, as for Egyptian businessmen, the fact that the event is conducted officially and involves structures associated with the state may be important.

If a Russian enterprise is a manufacturer, then a good option would be a reverse business mission or an invitation to visit the production site in Russia. However, it should be kept in mind that the process of obtaining a Russian visa for Egyptian citizens can be lengthy. It is recommended to allow at least 40 days from the date of document submission to avoid unpleasant consequences such as postponement or cancellation of the trip and negotiations.

The main working languages for communication with Egyptian businessmen are Arabic and English. The first option is more preferable but usually requires an interpreter. As for business etiquette, it is quite typical for communication with representatives of any polyactive culture and Islamic society. It is important to remember that direct refusals are practically non-existent, and evading a direct answer, delaying communication, and lack of feedback clearly signal a lack of interest in the commercial offer, which requires revision, or one must wait for a more favorable moment.

The key to successful business with Egyptians is a focus on sustainable relationships, flexibility, interest in personal communication, and attention to the partner's problems. This approach does not guarantee quick results but is often successful in the long term.