The Egyptian citrus industry has suffered quite a bit from the war between Ukraine and Russia. After speaking to citrus exporters, it has become clear that there have been immediate consequences, such as a troubling logistical situation when exporting to Russia, on top of the question if exporters will actually get paid for their produce if the shipments to actually arrive.
“The fruit and vegetable industry already faced several challenges before the Russian-Ukrainian war started. Most importantly, the sector faced logistical challenges, such as container shortages, increased shipping costs and retarded deliveries ever since the outbreak of the Covid-19 in 2020. These challenges still impact the industry till today,” one Egyptian citrus trader explained. “Now, due to the war, things became even worse and growth plans for companies like ours have become a far-fetched dream and the economic repercussions became larger on the whole country. Considering the fact that Russia is the biggest importer of Egyptian citrus with an approximate value of $200 million, and that both Russia and Ukraine absorb nearly 20 per cent of our production, it is easy to imagine how severe the impact is.”
There are a lot of uncertainties when exporting produce to either Russia or Ukraine, another citrus exporter states. “With the outbreak of the war and the international sanctions imposed on Russia, shipping fruits and vegetables to Russia or Ukraine has become risky for us. This is true for most exporters. You put your cargo in the water and you can’t be sure if it will reach its destination or not. And even if you are lucky and things go smoothly until the delivery, there comes the risk of not receiving your money. Payments are not always guaranteed, owing to the sanctions on the Russian financial system. Shipping and insurance costs have once again increased, which means goods are sometimes too expensive to leave a margin of profit.”
As challenging as the citrus season is going to be for Egyptian citrus traders, other countries might be able to take advantage, such as Turkey: “The competition of the Egyptian citrus with Moroccan and Turkish is old and conventional and everyone tries to improve quality and reduce cost, as these are the main tools in competition. However, I believe that our orange has its fans and consumers who wouldn’t easily substitute it with oranges from any other origin. However, Turkish citrus will gain the largest advantage from the situation in Ukraine. Turkish produce will be able to fill the shortage of fresh fruits supply in Russia and Ukraine due to both the geographic factor and politics as well.”
A solution to the challenges will be to export the produce to different markets. Egyptian citrus exporters are in luck when it comes to that part, as several markets have opened up to the Egyptian produce. “While war constitutes a severe and immediate challenge, Egypt can ease the short-term shocks to citrus exports through shrewd fiscal policy and assertive acquisition efforts in cooperation with other partners that are also major consumers of these commodities. There are a number of options for the Egyptian citrus that might help. A considerable number of new and promising markets are being opened like Brazil, the Philippines, Japan, Canada and maybe New Zealand and South Korea.”