Egypt pulls out stops

Potatoes are big business in the UK and our love of this versatile vegetable shows no signs of abating. Egypt is a traditional supplier to the UK during the chilly winter and warmer spring months and according to Defra figures, the UK imported more than 21,663 tonnes of Egyptian potatoes last year, a significant rise on 15,875t in 2004.

First shipments normally enter UK shores in early January. According to a report by the British Potato Council, this season’s first imports, which consisted of 192t in eight containers, arrived six days earlier than last year. “Further deliveries are expected to be slow this month before increasing more rapidly as February progresses,” says the association.

Egyptian Potato Consortium (EPC) received its first vessel of new season potatoes on January 3. “First shipments of the Nicola potato variety left Egypt on 23 December,” says EPC chairman Dr Ihab Tadros.

EPC has traded with the UK for more than 20 years, producing potatoes in the Salhia area, located between Cairo and Alexandria. Its packhouse is at Kafr El Zayat in the Cairo-Alexandria corridor.

Tadros claims that EPC has been the largest shipper of Egyptian potatoes to the UK for the last decade. As well as the Nicola variety, EPC also handles the varieties Charlotte and Maris Peer later in the season. It continues to trial new varieties.

“We initially supply in 20kg bags and the potatoes are delivered in peat moss to keep the potato skins moist,” Tadros says, adding that towards the end of January, potatoes are packed in Jumbo bags for prepackers and retailers.

Other exporters include Daltex which produces a wide range of varieties. Its main export lines are Charlotte, Nicola and Maris Peer.

The company has recently added the Princess variety to its portfolio, says Mayada Eid, operations manager for Hana Fresh, the UK marketing arm of Daltex.

“Princess is a salad potato, which is more rounded and has a special texture and taste,” Eid says. “We are already increasing our volume in all varieties but we are mainly interested in Princess and we are now planning a promotion with Tesco.”

Eid says that since the formation of Hana Fresh, volumes have increased dramatically. The UK is notorious for its exacting standards and Hana Fresh is confident that it is applying the best practices.

“We always work on developing our quality by using state-of-the-art technology in our packhouse and adhering to agriculture practices,” she says. “Over the past two years we have acquired new certificates like Tesco’s Nature’s Choice. We are also applying BRC and HACCP throughout our packhouses and grading lines. We continue developing our quality and our clients give us all the support to do so.”

Furthermore, Daltex has expanded its supply of seeds from the UK to strengthen its relationship with this market,” Eid adds.

According to Abdel Raouf from the Egyptian embassy in London, Egypt produces more than 2m tonnes of potatoes annually on over 45,000 hectares of land.

Potatoes are Egypt’s largest horticultural export and in recent years the EU has accounted for between 70-90 per cent of potato exports.Egyptian potatoes are subject to export quotas set by the EU and enforced by UK customs. This year, Egypt can send 250,000t of potatoes without incurring duty charges.

“There are few limitations on Egyptian potatoes entering the UK during the December-April period so long as volumes are within the EU quota,” Raouf says. “Normal tariffs will be put on extra volumes during the season or even on the post-season period.”

Egypt has long been a favourable supply source. “Egypt’s sunny climate during the winter makes it suitable for harvesting potatoes and there’s less competition from Europe as growers don’t lift new potatoes during the winter time,” says Tadros.

However, over the last decade there have been noticeable changes in UK imports. Italy, which was historically first on the winter market, has seen its market share eroded following revolutionary production and storage techniques by British growers.

Meanwhile, exports from Israel, which represents Egypt’s main rival, have skyrocketed from 2,600t in the mid 1990s to more than 60,000t.

Eid is philosophical about Israeli imports. “We consider Israel as the main competitor but it is always good to have competition so that we can work on being better,” she says.

Other competitors include Morocco, which enters the market later in the season, Tadros notes.

Egyptian producers claim they enjoy a number of advantages in supplying the UK market, but admit that they also face challenges.

“Our challenges revolve around the EU regulations that hinder our growth in Europe as a whole,” Eid says. “It is the endless paperwork required and the inspection in the ports which causes delays and costs.”

Furthermore, Tadros believes that consumption of imported new potatoes is declining in the UK. “This is partly due to relatively high prices for imported potatoes,” he notes.

“We’re also seeing new techniques of storing potatoes which now means that new potatoes can be stored for as long as eight months. This means some consumers are unwilling to pay high prices for fresh potatoes.”

However, Tadros is keen to emphasise that the UK will always be a strong concern. “The UK will always be a very important market for us in Europe but it’s now our number two market. In recent years Germany has overtaken the UK to become our number one market.”

Hana Fresh is also confident Egypt will continue to enjoy strong links with the UK. “Our opportunities mainly come from our customers’ belief in us and in our ability to provide them with what they need,” says Eid. “We do not just sell potatoes. We care for our clients reputation and profitability and we go the extra mile to ensure that they are satisfied with our service.”

In terms of overall volumes this year, Tadros anticipates that Egyptian shipments could be lower due to export restrictions as the government tries to control product quality.

The industry is taking a hard line on tackling the brown rot problem, which affects potato yields and hit the sector during the 1990s.

Daltex has recently invested in 10,000 acres of land. “We have invested in new virgin land so there’s no chance that even one tuber will have brown rot,” Eid says.

Only experienced growers are allowed to grow potatoes that are then exported, according to Tadros. “Stringent measures are in place, potatoes are tested during growing and after harvesting,” he says.

It’s not only Egyptian potato producers and exporters who are doing their bit to contain brown rot, observers believe. “One can’t argue that the Egyptian government is carefully addressing the potato issues at home to maintain export regulations to keep Egyptian potatoes at a very high profile,” says Raouf.

Reports differ over how many cases of brown rot were detected in Europe last year. Some say six cases were confirmed, but the Defra website notes only one finding was detected.

Defra is also keen to emphasise it is playing fair. “Despite rumours and reports in some foreign newspapers, the UK is not applying any more stringent measures to Egyptian potato imports than in previous years,” Defra says.

“The measures are intended to minimise the risk of infected potatoes being imported and infecting domestic production through contamination of water courses. They are required by EC legislation and as such should be applied by all 25 member states.”

The European Commission has been supporting the Potato Brown Rot project since 1998, with a cash injection of €2.6m. Under this project, the EC has supplied a laboratory, research greenhouse and national and international training on the symptoms, spreading and monitoring of brown rot disease. A sophisticated traceability system to control the production and export of potatoes to the EU is also being implemented.

While the brown rot issue is unlikely to be fully resolved in the foreseeable future, marketers agree that Egypt’s potential to export any number of fresh produce items to the UK market is significant.

Raouf believes that further synchronisation is needed with more wholesalers and multiples to boost the deal.

“The multiples such as Tesco, Waitrose, M&S etc have the real opportunities to buy from Egyptian companies who apply EurepGAP and other standards to their operations,” Raouf says.

He further believes there should be more onus on supplying other areas outside of London and identifies opportunities in key cities such as Manchester and Bristol.