Supply and demand are among the most important economic concepts that shape the movement of the Egyptian market. They directly influence prices, production, consumption volume, and investment decisions. With the significant changes the Egyptian economy has witnessed in recent years, understanding these concepts has become essential for anyone working in investment, trade, industry, or project management.

First: What Is Demand in the Egyptian Market?

Demand refers to the quantity of a product or service that consumers are willing to buy at a specific price during a defined period.

Demand in Egypt is affected by several factors:

🔹 1. Disposable Income

Higher income increases purchasing power, while lower income reduces consumption.

🔹 2. Prices

According to the law of demand, when prices rise, demand generally decreases and vice versa.

🔹 3. Availability of Substitutes

A key factor in the Egyptian market: the availability of cheaper or more accessible alternatives reduces demand for the original product.

🔹 4. Social and Cultural Trends

Such as rising demand for technology, education, and healthcare services.

🔹 5. Future Expectations

If consumers expect prices to rise, current demand increases to avoid higher costs later.

Second: What Is Supply in the Egyptian Market?

Supply refers to the quantity of goods or services that producers are willing and able to sell at a specific price within a certain period.

Supply in Egypt is influenced by:

🔹 1. Production Costs

Higher raw material or energy costs reduce available supply.

🔹 2. Technology

Better technology increases productivity and reduces costs, thus raising supply.

🔹 3. Number of Producers

More producers entering the market leads to greater supply.

🔹 4. Government Policies

Taxes, customs duties, subsidies, and import/export rules greatly affect supply levels.

🔹 5. Economic Conditions

Inflation, exchange rates, and interest rates all impact the ability to produce in the Egyptian market.

The Relationship Between Supply and Demand in Egypt

The basic market equation is:

Equilibrium price = the point where supply equals demand

But in Egypt, the market frequently experiences:

⚠️ Demand Gaps (Excess Demand)

Where demand exceeds supply → leading to rising prices and product shortages.
Example: high demand for certain food items or construction materials while production remains constant.

⚠️ Supply Gaps (Excess Supply)

Where supply exceeds demand → causing falling prices and low sales.
Example: overproduction of certain agricultural products compared to market demand.

How Supply and Demand Affect Projects and Investment in Egypt

⭐ 1. Setting the Right Price

Pricing cannot be determined without analyzing demand and supply levels.

⭐ 2. Production Decisions

When demand increases, producers are encouraged to expand and invest.

⭐ 3. Understanding Competition

High supply indicates strong competition; low supply indicates an opportunity to enter the market.

⭐ 4. Determining Project Feasibility

Supply-demand analysis is a core part of any feasibility study in Egypt.

⭐ 5. Risk Management

Investors can reduce risks significantly when they understand market trends.

Examples from the Egyptian Market

✔ Growing Demand for Technology

Digital transformation has boosted demand for devices and tech services.

✔ Increased Supply of Food Products

Due to investments in agriculture and modern farms.

✔ High Demand for Real Estate

Driven by population growth and investment culture.

How to Analyze Supply and Demand Before Starting a Project in Egypt

1. Study customer behavior

2. Analyze competitors

3. Track current and future pricing

4. Assess consumption levels

5. Monitor economic changes

6. Use official data and market research

7. Consult a specialized firm like Fathalla CPA for accurate market studies

Conclusion

Supply and demand form the foundation of market behavior in Egypt.
A deep understanding of both helps entrepreneurs and investors:

• Choose the right project

• Price products correctly

• Analyze competition

• Reduce financial risks

• Make strategic investment decisions

The more accurate and professional the analysis of supply and demand is, the higher the chances of success in the Egyptian market.