Confirming earlier reports, more Egyptian citrus growers celebrated an exceptional quality of harvest this season. Mr. Amgad Nessem, export manager of Elteriak Farms, said: "This season's harvest is characterized by very good quality and an abundance of medium-sized fruits. In Navel oranges, for example, we do not have big quantities of large-sized fruits as was the case last season. Medium sizes are very appreciated in Europe, India, Bangladesh, and Singapore." The competition between Egyptian producers in these markets will be fierce, according to Mr. Amgad, since the Russian and Belarusian markets are not accessible.
Besides Russia, which is a large consumer of Egyptian oranges, the UK is another traditional destination for Egyptian citrus, though this market is expected to shrink because of the general inflation.
"Therefore we're hoping to sell our products through the Dutch hub, and through Rotterdam to have access to France, Belgium, and Germany. This puts a lot of power in the hands of the clients we have in Europe, and we expect a lot of pressure on us to reduce our prices. In general, the season is exceptional but we face significant challenges in the global market. We hope to be able to meet these challenges."
One of these challenges is the big increase in energy costs in Europe, which cascades into increased prices of waxing, and packaging costs.
Mr. Amgad explains: "For example, the price of 15 kg packaging boxes has increased by 60-70%. This is compounded by the depreciation of the Egyptian pound, which has lost 40% of its value against the U.S. dollar in the last two weeks, further increasing the burden on our shoulders."
According to Mr. Amgad, this will not automatically translate into higher prices for Egyptian citrus, as the devaluation of the pound will also have an effect in the opposite direction, but it adds to the challenges faced by Egyptian producers who have to gauge and maintain prices.
Elteriak Farms is now seriously targeting Latin American markets, such as Brazil, Mexico, and Argentina, in addition to Canada, which are attractive countries for Egyptian citrus. Mr. Amgad said he had met a decent number of importers from these countries, who expressed their preference for Egyptian produce over Spanish produce for example, especially when it comes to Valencia oranges.
Mr. Amgad adds: "This is an excellent opportunity for importers from these countries and Egyptian exporters to establish stable partnerships and maintain price steadiness, as few Egyptian producers reach these markets. The only inconvenience is the long shipping time, a problem that is beginning to be mitigated: for example, shipping time has been reduced from 45 to 22 days from Egypt to Montreal. The increase in business will surely result in new shipping lines that will further reduce the transit time."
Elteriak Farms adopts an intense marketing strategy, with a presence in all international fresh fruit exhibitions. This strategy supports huge investments: the company currently exploits 15,000 Feddans (6300 ha) up from 5,000 Feddans (2100 ha) a few years ago and is preparing 5,000 extra Feddans for the next season, all in the most fertile lands of Upper Egypt, with a diversification of products and an abundance of quantities.
For orange produce alone, the company has expanded 1,000 Feddans (420 ha) more this season and also acquires avocados, mangoes, and Megdool farms every year. The company has invested in producing the energy it needs through a German-built solar panel farm, in addition to some 20 solar power plants across the map, anticipating the problems currently suffered by its main competitors in Spain.
For now, the only "real competitor" of Egypt -according to Mr. Amgad - is Spain. "We observe that citrus production in Spain has been affected by a recent drought and an energy problem related to the political crisis in Eastern Europe. We're not affected by these problems, as we have stable energy sources, including gas, and an abundance of water thanks to the Nile flooding. Nevertheless, we invest massively to avoid the issues that our counterparts in Spain have encountered."
Mr. Amgad adds: "Elteriak Farms is part of a group that produces mechanical parts, irrigation equipment, and heating and air conditioning systems, ensuring operational stability in the face of increasingly unpredictable hazards."
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