The Egyptian season for red onions has in general been average. “Prices weren’t as high as last year, in part due to the devaluation of the Egyptian pound and trade has been slower than usual. But all in all, things should be OK,” says Ahmed El Bessoumy of the Egyptian company Agro Alex Group. “We’ve had a good season with lots of demand. With red onions, we manage to fill the gap in the market between the old Dutch crop and the new Dutch crop, which is pretty much our market window. Last year we finished early due to bad quality. But as we entered the market earlier, we could capitalize on higher prices, leading to a overall good season.”
According to El Bessoumy, other producing countries have been providing onions that are cheaper than the ones from Egypt. “This year, we had to store our onions in order to market them later in the season. While this gave us higher prices, the prices weren’t as high as last year. So all in all, this hasn’t been a great season, but it hasn’t been catastrophic either.”
El Bessoumy thinks the export of red onions will last three more weeks at best. “It all depends on the Dutch production. As soon as the Dutch onions hit the market, there is no longer any demand for Egyptian onions.”
The main markets for Agro Alex Group are European countries like the UK, Germany and the Netherlands. The company has lots of experience exporting to these regions and isn’t set on expanding into new markets. “Occasionally you see temporary changes in the markets, such as the lack of onion volumes from India, but other than that we’re exporting to markets we’re familiar with.
As the market frame for Egyptian onions diminishes competition, most competitors for Agro Alex Group are other Egyptian companies. “Internal competition depends on the level and scale you’re working at. We’re one of the biggest exporters and we’ve built a reputation with retailers with regards to our quality. There is some competition on prices, but quality-wise, we’re the biggest onion company of Egypt.
Sweet potatoes
From August onwards, Agro Alex Group is going to supply sweet potatoes to European markets, which have seen a rise in demand. Sweet potatoes are still a relatively new product for the Agro Alex Group. “American sweet potatoes may have higher quality, but ours are cheaper. While we’re trying to penetrate the market, we’re still kind of new to this. Last season we exported our first batches of sweet potatoes, which were mainly sent to the UK market.”
The consumption of sweet potatoes on the UK market is mainly due to the large number of consumers with a South East Asian background. “We also export to Germany and the Netherlands, but the UK market is by far the biggest.”
While working on its sweet potato business, Agro Alex Group had a good advantage from its existing expertise related to regular potatoes. “Potatoes are our core business. We already had the necessary facilities, network and logistics in place, such as packing stations, relationships with retailers and such. It was easy to change these for sweet potatoes.”
Agro Alex Group is set to export about 20 to 30 containers of sweet potatoes this year, with half of the production being supplied by contract farmers and the other half by its own production facilities. The customer base mainly consists of retail chains.“The main challenge as a new exporter is to set your footprint in the best markets and to find access to retailers. We’ve been working at it for three years,” says El Bessoumy. Last year, the Egyptian government decided to devalue the Egyptian pound. This caused prices for imported products such as raw materials to increase. “However, for us as an export company, this has given us a good year. We were able to offer competitive prices on the world market and we were able to set up direct programs with foreign retailers for packaged products.”
For more information:
Ahmed Khlaed El-Besooumy
Agro Alex Group
Tel: 00203-593-2320
Mob: 00201-224-4125