Egyptian orange farmers juice gains from export boom
We’ll send you a myFT Daily Digest email rounding up the latest Agricultural trade news every morning.
Oranges grown in the desert are driving a boom in citrus exports from Egypt, establishing the country as one of the world’s top suppliers of the fruit.
Officials in Cairo say Egypt has become the world’s largest exporter of oranges by volume, surpassing rivals Spain and South Africa, though these two countries still make much more in revenue from their orange exports.
Egypt exported almost 1.8m tonnes of oranges in 2019 scraping to first position just ahead of Spain, according to the International Trade Centre, a joint agency of the World Trade Organization and the United Nations. Revenue from exports was around $660m. Disruptions earlier this year due to coronavirus may mean the quantities exported will be less than 2019.
“Global orange consumption has grown and Egypt has been able to capture the increase in the market,” says Mohamed Abdel Hady, an orange grower and exporter who heads the Citrus Committee at the Agricultural Export Council, a business association.
“Egypt has the advantage of a cheap currency which means our prices are competitive. Oranges have made a jump in income for farmers so they are planting more.”
The Egyptian pound fell steeply against the dollar in 2016 as a result of a devaluation that was a condition for an IMF bailout.
Tom Leenheer, commercial director at Van Ooijen Citrus, a Dutch fruit and vegetable wholesalers, says in recent years he has been “seeing more and more Egyptian oranges on the market. The price/quality [equation] is good.” It is also noticeable, he adds, that increasing numbers of Egyptian growers were starting their own companies in Holland to trade in orange imports from Egypt.
Most of the country’s orange exports come from large farms on reclaimed desert land established during the past three decades, rather than the old fertile fields of the Delta and Nile Valley, where landholdings are fragmented and farmers cannot afford the level of investment required to produce for export.
Sherif el Maghraby, chairman of Magrabi Agriculture, one of the country’s leading fruit and vegetable exporters, says: “Typical land ownership in the Delta is less than an acre. The big investments are all made in the desert. Technology comes with that, and farms are big so they can afford to have their own pack houses.”
Private sector investment in desert farms started to take off in the 1990s in Egypt and, says Mr Maghraby, it was given a boost by Israeli agricultural expertise brought in after the peace accord between the two countries in 1979. Government subsidies to exporters have also helped the expansion, he adds.
“We are long-term investors,” says Mr Maghraby, whose agriculture business was launched around 30 years ago when his family was casting around for a new venture to start after moving back to Egypt from Saudi Arabia.
“When we started, most people were getting out of citrus because old plantations were being split up into smaller holdings [as they passed down the generations]. But we realised it was a serious business and suitable for long-term investment. So we kept buying [desert] lands to reclaim and cultivate.”
His company now exports around 60,000 tonnes of oranges a year to 58 countries, with its main markets in western and northern Europe.
Valencia oranges used for juice make up most of Egypt’s exports at around 60 to 70 per cent, according to Mr Abdel Hady. The rest is mainly navel oranges, some of which are planted in the old lands but most still come from the big farms in the desert.
He says that over the years exporters have learnt to produce to the required standards demanded by markets — these include the permitted level of pesticide and the selection and grading of the fruit to meet the requirements of importers to minimise rejections of shipments. “We also introduced many new high-yielding varieties,” he says.
In recent years, Asia, in particular China, has been a growing market for Egyptian oranges, exporters say. “All the new markets in south-east Asia represent the future for us,” says Ashraf Abou Ismail, general manager of Sonac group, an exporter of agricultural produce.
“The population size is multiples of that in Europe. I sell in China, India, Malaysia and Indonesia much more than in Europe. They grow oranges in these countries but in a different season.”
He says he was a pioneer among Egyptian exporters who began sending oranges to China eight years ago. Along with Bangladesh it is his most important market.
“In China they have some of the highest standards for oranges in the world. They don’t accept a single blemish or scratch on the fruit and I have to precool shipments and get rid of any fungus or insects before the 24-day voyage . . . Of course, all this adds to cost.”
Exporters are confident there is still ample space for growth in exports to new markets in Asia. If Egypt could branch out and add “easy peelers” like mandarins and clementines, Mr Abdel Hady says, it would help it grab even more market share: “So when you load a shipment there would be many varieties on it and the customers would know that you can supply everything.”
Get alerts on Agricultural trade when a new story is published