According to EastFruit analysts, the simultaneous and sharp devaluation of the national currencies of Turkey and Egypt is causing unprecedented concern among citrus producers from the European Union, primarily from Spain, Italy, and Greece.
The problem is that the depreciation of the currency makes citrus fruits from Egypt and Turkey very competitive in price, despite the added costs of logistics. At the same time, the EU is experiencing an increase in the production costs and a shortage of labor for picking the fruits, which forces farmers to seek higher prices or incur losses.
The greatest threat comes precisely from Egypt, which even puts pressure on the prices of citrus fruits exported from Turkey. As a result, according to international expert on the fruit and vegetable business Fedir Rybalko, a wave of bankruptcies of fruit exporting companies may begin in Turkey due to growing competition from Egypt.
Citrus exports are an important source of foreign exchange earnings for both: Turkey and Egypt. Turkey received a record $1.1 billion from citrus exports in 2023, and Egypt received about $0.8 billion.
More than 90% of Egypt's citrus exports are fresh oranges, while Turkey exports mainly tangerines and lemons. However, even those small volumes of lemons and tangerines that Egypt offers for exports have a significant negative impact on the prices of products exported from Turkey. In the meanwhile, Egyptian orange puts enormous pressure on the prices of oranges from Spain.
Logistical bottleneck in the Red Sea caused by Iran-backed Houthis, forces both Turkey and Egypt to sell more to the EU, which adds even more pressure. Moreover, both countries sell a significant share of their citrus fruits to Russia but with the Russian ruble devaluating regularly, the demand there is not very stable and exporters prefer to sell to more stable markets.
For more information: east-fruit.com