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Mohamed Ghallab – Agro Egypt
Turkish oranges force Egyptian Navels from Russian market
The Egyptian season for Valencia oranges is expected to start in a week.
Egyptian exporters are still working with Navels. However, according to Mohamed Ghallab of the Egyptian export company AgroEgypt, the season has been challenging thus far. “The Russian market is hard. Prices for Egyptian oranges are high when compared to Turkish ones. Turkish exporters are selling lower than us, with price differences of 20% to 25%. As our oranges are very expensive for Russia, the export to Russia has slowed down. This season, we exported less than half the volume to Russia we sent last year.”
According to Ghallab, Egyptian exporters are forced to seek out other markets. “Vietnam has opened its market for Egyptian fruit, which is a good thing. Vietnamese importers are taking in good volumes, especially with regards to Navels. The Vietnamese market wants big sizes. We’ve already been working with Vietnam, also with regards to other types of fruit like mandarins and especially lemons. As for China, we only send very limited volumes, as China doesn’t really take in Egyptian Navels.”
Egyptian Navels have been available since mid November. The season saw some issues with coloration, which was 70% slower than usual due to the hot weather. Fully colored oranges were available from the beginning of December. The greener oranges were solely exported to remote eastern markets.
The international market for Navels saw more competition than normal. “Only two weeks ago, other producing regions like South Africa and California were still marketing Navel and Valencia oranges. Egypt is overloaded in its supply as well. However, Egypt has a good consumption of Navels. Egyptian consumers eat Navels a lot. Prices started out very high, then went down a bit and have now become stable. Overall, the demand for domestic oranges has remained the same, but it is the cheapest fruit in Egypt at the moment, so demand is good,” says Ghallab.
With the Navel market under pressure and markets in Eastern Europe out of the question, Egyptian growers and exporters are switching over to Valencia oranges. “During last season, the prices for Valencia oranges became unrealistically high. Growers and exporters were expecting something similar to happen to Navels. Growers are holding their fruit back and are asking higher prices. However, these unreasonably high prices for Navels are proving to be unsustainable in the future.
According to Ghallab, there is a chance that prices might improve a bit for Navels. While most countries outside of Egypt prefer Valencias, Egypt likes Navels, especially in February and March. “We don’t really eat Valencias, we only use those for juice. In the coming weeks we’ll change to Valencias, but we don’t want to rush things. We want to be sure of the coloration and sweetness.”
“In the end, exporters are forced to gamble when acquiring fruit. They will be met with intense competition. Growers might make good money, but exporters and packers will carry all the risk. Oranges represent 50% to 60% of their business and they have to deal with added expenses, such as packing materials, packing house expenses and Fobbing costs. It forces us to gamble. To be honest, our sector is a dangerous business, right now,” says Ghallab in conclusion.
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