The Egyptian citrus export season to Asia has seen mixed results this year, shaped by both global market dynamics and geopolitical challenges. While pricing at origin has been more stable compared to last season, exporters are facing increasing pressure from rising logistics costs and weak demand in key Asian markets, according to Amr Abdelhafiz, CEO of King Egypt.
© Amr Abdelhafiz
Difficulties began at the start of the Egyptian orange season with the Navel variety, due to intense competition, and continued into the Valencia campaign weeks later. Abdelhafiz says, "Looking at the Navel campaign, competition in Asian markets, particularly from China, remained strong. However, the main shift this season has been observed during the Valencia campaign. Unlike last year, when Valencia prices reached exceptionally high levels and forced many exporters to exit the market early, some as early as March, this season has seen more reasonable and controlled pricing at origin. This stability has allowed exporters to continue shipments for a longer period, even if margins remain under pressure."
Despite this improvement in pricing, the season has been significantly impacted by the ongoing geopolitical tensions involving the United States, Israel, and Iran, according to the exporter. He adds, "These developments have led to a global increase in fuel prices, which in turn raised inland transportation (trucking) costs as well as international freight rates. In addition, shipping lines introduced extra surcharges, including "war risk fees," and in some cases were forced to reroute vessels via the Cape of Good Hope instead of the Red Sea. This has resulted in longer transit times, higher costs, and increased uncertainty in logistics planning."
© Amr Abdelhafiz
When these additional costs were reflected in the final selling prices, many Asian markets struggled to absorb the increases. As a result, the Valencia season cannot be considered among the strongest, despite relatively stable farm-gate prices; the exporter continues.
Abdelhafiz, who specializes in the Asian market, shares that the orange export campaign to Asia has been overall underwhelming. "In terms of market performance, Asia has generally underperformed this season. The Chinese market, in particular, has been challenging since the start of the Valencia campaign in January. Selling prices have remained under pressure, with current market levels for Egyptian Valencia oranges ranging between 110-120 RMB for good quality and 80-100 RMB for lower grades. These levels are not considered profitable for most exporters. The Indian market has followed a similar trend, with weak demand and limited returns.
© Amr Abdelhafiz
Overall, Asian markets have not delivered the expected performance so far this season. However, there is still some cautious optimism that demand may improve slightly towards the final part of the campaign," he continues.
The Valencia season is now approaching its end, likely concluding by the end of May, and the focus is shifting towards closing shipments with minimal losses rather than maximizing profits. We are adapting to a more challenging environment, where managing costs and maintaining market presence have become the key priorities," the exporter concludes.
For more information
Amr Abdelhafiz
King Egypt
Tel: +201274899339
Email: [email protected]
