"China: "Egyptian orange season becomes more clear in 2018"

Egyptian oranges benefited from the uncommon market conditions in China in 2017 and will receive a warm welcome from Chinese importers in 2018. The import volume of Egyptian grapefruit and Navel orange on the Chinese market has clearly increased in comparison to the previous year. At the same time, more and more importers travel to Egypt to visit fruit farmers and personally select and purchase fruit. However, Mr. James Wang, who represents the Egyptian citrus export company Forwell as their regional manager for China, believes that "this market is inclined towards the seller, and as this tendency grows stronger, so will the favorable position of exporters become apparent."

"Current conditions in production areas show that many domestic importers go directly to the fruit farmer, and their plans exceed those of last year. This causes a general optimism among fruit farmers for Chinese prospects this year. However, based on years of experience in the fruit market we believe that as these market conditions continue, where both seller and buyer are optimistic, the market risks actually increase. When supply is unable to satisfy market demand, it is easy for problems with product quality to occur. In these times the favorable position of exporters becomes more apparent."

"Although Forwell does not own orchards in Egypt, we do have a packaging factory. At the same time, we upgraded the selection process on our assembly line. This has strengthened our ability to enforce product quality. Even more important, however, is that our customers not only come from China, but also from the Middle East, Europe, and Russia. These countries also have a market for second-grade and third-grade oranges, as well as oranges suitable for the juice-press. We are not at all worried that we can only sell first-grade oranges. It is precisely because we have a market for low-grade oranges that we can enforce strict and stable product quality. This is our most important asset for the Chinese market."

 

"This attention to quality is also embodied by the continued development of the Egyptian orange market in the past few years. As we all know, Egyptian oranges obtained access to the Chinese market in 2014. Almost all orange export to the Chinese market in the period 2014-2017 went via exporters because Egyptian fruit farmers were unfamiliar with the Chinese market. In this same period the market price of Egyptian oranges went from the initial 80 yuan [12.73 USD] to 130 yuan [20.68 USD] or 140 yuan [22.27 USD] in 2017. The price of Egyptian oranges went up even further, to 150 yuan [23.86 USD] or 160 yuan [25.45 USD], because South African exporters started to promote the brand Sunfare. We think that exporters have an understanding of Chinese market demands that is important in the midst of all these developments."

 

"We think that there will be more and more business opportunities between Chinese buyers and Egyptian fruit farmers as the orange market becomes more mature. However, we do not think that the market will mature this year. This is becoming clear on the Egyptian grapefruit and orange market even this early in the season."

"At the same time there is a risk of unexpected results as a consequence of the transport of fresh fruit products. There is a significant risk for product quality. Egyptian fruit farmers are far removed from China and will find it difficult to solve issues related to transport and product quality. Forwell, however, has already established an office in Beijing. We are the first to learn of developments in product supply and retail. We promptly communicate problems and solutions to importers and buyers. We give them better tools to resolve issues."

"We therefore think that exporters have a favorable position this year in the export market of Egyptian oranges, whether it is with regard to issues of quality control, distribution, or retail."