The Egyptian navel orange season begins on December 1, in the shadow of the Red Sea crisis, which has severely impacted the industry. The outbreak of the crisis had coincided with an abundance of production last season. Exports reached an all-time high of over 2.3 million tonnes, but prices fell due to the crisis, making the campaign unprofitable.
Egyptian exporter Mostafa Ali says, "We're still worried and wondering how the ongoing crisis will affect us this season. The major shipping lines still consider the risk too high and are still deserting the Red Sea. We still have big logistical issues overall. Yet there are indicators that the impact of the crisis will be milder than last season."
The exporter continues, "In terms of production, we have been able to avoid oversupply this season. Volumes are lower, with less fruit density on the trees. This will help us to better control prices, but also to have larger sizes, and this is crucially needed by the industry when high supply was a weakness last season."
According to Ali, Egyptian exporters can count on a few shipping companies who take the risk of sailing the Red Sea and are safe from attacks. He adds, "There will be more room and flexibility to deliver to Asian markets while waiting for the big players to return. We're also expecting a settlement of the crisis with the election of Donald Trump, who may be able to end the war in the region" the exporter hopes.
The crisis made it difficult for Egyptian exporters to supply their Asian markets, which account for 30% of export volumes in a normal year. But it has also prompted exporters to find other outlets, with success in Latin America and North America. Ali says, "I think demand from new markets in the Americas will continue to grow this season, especially with the improvement in sizes and quality."
"Prices will therefore be higher than last season. Apart from the balance of supply and demand which has improved in our favour, and the quality improvement too, we need to raise prices as our costs have increased this season," Ali adds.
"I've been in this industry since 2014 and it's fascinating to see how it's so fragile to external factors yet so resilient. I've worked as an export manager for major Egyptian exporting companies and decided to strike out on my own this season with Premium Sourcing," Ali concludes.
For more information:
Mostafa Ali
Premium Sourcing
Tel: +20 10 07350313