Key Egyptian exports to the UK have been disrupted this season, with citrus and berries feeling the brunt of climatic anomalies. As the grape season swings into action, pundits are already reporting an anticipated fall in yields.
“The weather was hot in mid-April, with temperatures of up to 37ºC - about 7ºC higher than the norm for this period,” says Sherief Kesseba, managing director of Nile Valley Group (NVG). “Yields seem to be about 15 per cent lower than last year; however, the weather has provided strong chill hours at the right times, and bodes very well for a strong, high-quality grape.”
Although producers are forecasting a smaller crop, NVG is anticipating a much stronger 2008 season, as it plans to export just under 2,000 tonnes of grapes. “NVG will increase its share by nearly 30 per cent this year,” Kesseba tells FPJ.
Dr Ihab Tadros, chairman of the Egyptian Potato Consortium (EPC), is optimistic about the upcoming grape season, although he estimates that yields could be down by 20-25 per cent on last season. Similarly to other producers, however, Tadros anticipates good quality.
According to Kesseba, demand for organic grapes still seems to be low. However, he points out that the market is adhering to ever tighter chemical and pesticide rulings, ensuring that grapes are already “nearly” organic. “This will allow for a smooth future transition to organic,” he predicts.
For the last three seasons, NVG has been adopting many organic substitutes to pesticides, with very good results, albeit at much higher costs.
The UK is NVG’s core market, to which it supplies in excess of 80 per cent of its volumes. As well as grapes, NVG also ships strawberries, oranges and peppers.
This year is an important one for NVG. It has more than doubled its growing area, acquired new land, invested in the further development of its packhouses and coldstores and, perhaps more importantly, Kesseba says, invested in its staff.
“We remain committed to the UK and the excellent relations built with our clients within this market,” Kesseba says. “We also continue to seek expansion throughout Europe, and build a similar base throughout the continent.”
Egyptian citrus is well known in the UK, with the orange season kicking off in late November and running through to late May. This season, EGCT, which packs citrus under the Extra, Venus and Master brands, exported the variety Baladi to the UK for the first time.
Like other citrus marketers, EGCT reports a challenging season that started with higher-than-normal temperatures during the growing period. “The 2008 season has been difficult - prices have been volatile and have not really settled,” says EGCT’s Rana Diab. “I don’t think the volumes sent to the UK this season will be as high as 2007.”
According to Prag Mistry, managing director of Fruitmann, the agent for Sonac in the UK, the last few weeks have seen a fall in citrus volumes by at least 20 per cent on forecasts. Furthermore, the season is drawing to an end earlier than normal due to the warm spell. “However, fruit quality has been fine so far, and we don’t anticipate any problems,” Mistry adds.
Established in 2005, Fruitmann is in its third year and says it has the support of grower groups looking for representation in the UK, without the exclusive tie-ins to specific retailers and/or category managers.
“We are primarily suppliers to processors, but also supply some retailers and wholesalers,” says Mistry.
Mistry says there seems to be an ever-increasing demand for Egyptian easy peelers, and Fruitmann conducted some trials earlier this year. “The fruit quality from Egypt is improving every year,” he says.
But while the UK is a good market for Egypt, Diab says it is not the biggestone and, compared to other markets, is unlikely to offer the highest returns. Nevertheless, despite a challenging season, EGCT is confident of future growth.
Meanwhile, Egypt has ramped up its strawberry production and exports in recent years and, according to Ian Waller of Redbridge Worldfresh, inclement weather threw up numerous challenges during the 2007-08 season.
Egypt’s western to eastern delta areas were affected by some extreme weather patterns from September through to the end of January. Temperatures reached the mid-30°Cs in mid-October, and remained high through to mid-November, compared to normal temperatures of around the mid- to high-20°Cs.
In addition, cold nights during December resulted in very late and slow-ripening fruit. The situation was exacerbated from late December until mid-January, when low temperatures, snow and ice in some production areas resulted in very low fruit availability.
“In short, the weather gave us all the surprises we could handle, and matching supply and demand was very problematic,” Waller tells FPJ.
Bright spots for Redbridge Worldfresh this season, however, have included the showing of a number of new varieties to its customers. “Our award-winning in-house breeding programme has been particularly successful in Egypt,” Waller tells FPJ.
While other crops gear up for the new season, Egyptian potatoes have been present in the UK since the beginning of the year. Tadros says potato prices and returns to growers have been good this season.
“I’m also very pleased to be able to say that there was not one case of brown rot, and that we have not had any problems with quality,” he adds.
However, Egypt is expected to ship lower volumes of potatoes to the UK this season. Tadros attributes the downturn to more sophisticated post-harvest and storage techniques. “It is now possible to keep potatoes for six months, and for them to come out of storage looking quite good,” he says. “That is why new potatoes that are coming out of the ground, regardless of the source, are not achieving really high prices.”
Tadros says Egypt is continuously working on new potato varieties and looking at reaching new markets. “Eastern Europe is one that is taking more volume,” he tells FPJ.
But for a number of shippers, the UK remains the linchpin. “I believe that the UK market represents a good return for exporters from November until the end of February, and then with Morocco and Spain entering the market, the returns become marginal,” Waller says.
“With the desire for a healthy product and the constant work and investment on varietal development to give consumers an improved eating experience, I think the potential for growth in many areas of the marketplace looks to be good.”
Opportunities seem plentiful, confirms Kesseba, who feels the UK market will continue growing, especially for pre-packed and organic products. In addition, he thinks the UK has taken the leading role throughout Europe by promoting healthy eating, and adding more fruit and vegetables to the daily diet.
“This has resulted in a growth in the sector, and will continue to raise the bar in terms of production requirements, which should eventually minimise the current price-chasing “dumping” of products, which sometimes happens in the UK market with product from all supply sources,” he adds.
Indeed, Kesseba argues that the problem with the UK is that it is prone to oversupply due to too many marketers - some of which do not have the correct quality - chasing high prices. “Of course, it does not quite work that way, and what ends up happening is that these volumes, which usually are not of the required specifications, put downward pressure on prices,” Kesseba says.
However, he argues that the UK is a good investment if importers maintain a policy based on only providing the highest quality in a consistent manner. “In our business, our worry is not how much money can be made during a good year, but rather during the bad years, how much money could be lost,” he says. “We believe that going the extra mile in terms of quality provides the insurance needed for those difficult years.”
Freight issues are expected to remain an issue this season, as the lack of availability of space and yearly increases in fuel costs could prove problematic.
In addition, Waller thinks varietal development could create the greatest competition for Egypt in the future. “With a successful variety that can be grown in countries that can utilise roadfreight against airfreight, the marketplace in November to February could become more competitive, and customers would welcome a geographical spread of supply to ensure a consistent availability,” Waller says.
In the meantime, however, Egyptian shippers are focusing on overcoming the current challenges, and are determined to make their produce as competitive as possible.
SEKEM EYES RETAIL OPPORTUNITIES
The Sekem group is confident of increasing exports this year. Supplying green beans, sweet peppers and peas, as well as dates, Galia melons, oranges and grapes, the group’s Mohamed Elbadawy is buoyed by prospects in the UK.
“For our product range - based on our current knowledge and contacts - the best opportunities are available in retail,” he tells FPJ.
However, he warns that producers need to invest in building strong relationships. “We have already experienced a change in consumer purchasing behaviour due to the new awareness about airfreight,” Elbadawy says. “Freight costs and the time it takes to transport are issues. Other supplying countries also have better or cheaper transport facilities.”
Nevertheless, Sekem is optimistic about future growth, and enjoyed a good response to its products, which include sesame bars, at the Natural & Organic Products Europe show, held in London Olympia, on April 13-14.
The group is overhauling its packaging for Sekem dates, and plans to unveil the design range later this year.
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