It looks like it’s going to be an interesting season for Egyptian fresh produce, with much hanging on how the UK supermarkets and large exporters play both the citrus and soft-fruit campaigns.
Citrus coming over to the UK, which mainly consists of the orange crop as well as easy peelers and lemons in smaller amounts, is a fairly stable market and starts in early December, according to EU regulations, and finishes in April. Following and competing with a strong citrus season in Spain, the Egyptian industry is expecting price pressure at the start of its campaign, but hopes that good quality will win out in the end. There are also concerns that large exporters are controlling too much of the orange offer from Egypt, meaning that smaller growers are missing out, however willing they are to adhere to the UK’s high standards.
The Egyptian strawberry season is seeing its own, separate issues play out. A much more demand-sensitive, volatile market, the Egyptian strawberry campaign runs from mid-November, with the first exports leaving the North African country last week, and continues into February to make the most of the Christmas, New Year and Valentine’s Day market opportunities. Last year saw a glut of Egyptian strawberries on the UK market however, and supermarkets are being accused of disregarding loyal suppliers and quality for cheaper offers.
Although there are whispers of new orange varieties working their way up to the UK supermarkets, Navel, Baladi and Valencia are still the main orange varieties that Egypt sends to the UK.
Egyptian grower Magrabi Agriculture will start exporting its orange crop, which consists of Navel and Valencia, as of next week and has already got its programmes in place with the UK supermarkets. “With oranges, we usually receive one fixed price throughout the season, or there is one change in the price,” explains Tarek Bedir, marketing manager for Magrabi Agriculture. “Apart from Navel and Valencia oranges, we also send a small amount of lemons to the UK. The production is not huge and the harvesting season is short as it runs from December to January, but the UK supermarkets are happy with the offer.
“We have seen normal conditions this season and have had no major issues, so it’s looking good for us. Spain has had a good orange season and has produced 25 per cent more than usual, so time will tell how this affects the market.”
Supplying the UK market with fresh and juicing oranges, family-run grower and exporter Sonac sends the Baladi variety to processors from December to January and then Valencia from mid-February to April. The company also sends a crop of eater Navel oranges from December to mid-February and then switches to Valencia. Although oranges are the company’s main offer to the UK, it also supplies a small amount of Italia lemons and hopes to send its first harvest of easy peelers this season. “The volume on the market this season will be sufficient, but EU regulations on exports will prevent farmers sending to the UK,” says Dalia El-Geman, export manager for the company, which exports 4,000 tonnes of oranges to the UK each season. “Some smaller companies want to follow the protocols but the bigger exporters control the programmes and are stopping the smaller grower getting into the market.”
But others in the industry aren’t as keen and believe that co-operatives are the best way for growers to export to the UK in the interest of protecting the Egyptian fresh produce industry’s reputation.
“The citrus industry as far as the UK is concerned is reliant on the big companies that know how to control programmes and there is a big potential for those who wish to invest,” says Khaled Dawoud, representative for Capespan in Egypt. “Using the market as a dumping ground for fruit or all hitting the market at the same time gives Egypt a bad reputation, when there are good people, good prices and good development within the industry. The citrus sector is booming in Egypt with mass planting of Valencia, more claiming of land and investment in logistics, the coolchain and coldstorage.
Dawoud also flags up that there has been a problem with the Navel orange crops in Egypt this season due to a new pest on the scene. With the variety making up about half of the country’s offer, it means that although there will not be a shortage on the UK market, that prices may go up and there will be more opportunity for country’s like Morocco. “Capespan will start exporting oranges to the UK in the next two weeks, but there will be a major decrease in Navel because of the summer heat and a new insect attacking the crop,” he says. “The price will go up and Egypt will see a shortage.”
Sonac believes that the challenge of the moment is the low prices it is receiving on its orange crop. “All markets are paying low returns for juicing oranges, including the UK and the Netherlands,” says El-Geman. “It is very low compared to six years ago. We agree to the minimum prices, but then they put the prices even lower. They keep on squeezing us so we are on zero profit and we do our best to cover the costs, but then companies choose our competitors that may not adhere to the right regulations.”
Egyptian soft fruit usually starts coming to the UK market in mid-November, but this year may see less volume from Egypt due to an oversupply last year. Also a grower and exporter of strawberries, Magrabi Agriculture has taken the brave decision to cut back its strawberry production for this year. “We have decreased our strawberry crop, which accounts for about 10 per cent of our business, by 20 to 25 per cent in the hope of maintaining the market level,” says Bedir. “We have started this month with very small volumes and hopefully we will see a premium at Christmas.”
Last season saw Egyptian growers receive the same price for strawberries at Christmas as they did for February berries in the 2008-09 season.
“It was a bad season for us and some British supermarkets were saying that there was a lot of fruit coming in from Egypt, which was putting the price down,” says Bedir. “There were so many sending in fruit, but how many of the exporters were delivering good quality? This is a major issue; there was no loyalty to suppliers that always sell good quality. Some supermarkets were looking at volumes and prices. We hope this season will be different.”
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