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Egypt’s agricultural exports: opportunities, challenges lying ahead - Daily News Egypt

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Egypt’s agricultural exports: opportunities, challenges lying ahead

Exports reach 5.2m tonnes in 2018, East Asia most promising destination, says AEC chairperson


Egypt’s agricultural exports have achieved a reasonable growth last year by producing 500,000 tonnes, to reach 5.2m tonnes, compared to 4.75m tonnes in 2017, which diverted the attention toward the ability of the sector to grow during the upcoming years.

Daily News Egypt organised a seminar in order to understand the situation of the agricultural exports and their future, in the presence of Abdel Hamid Al-Demerdash, the chairperson of the Agricultural Export Council (AEC).

During the seminar, the attendees discussed the international markets crises, whether in terms of the old markets or entering new markets. Several issues were highlighted, with the most prominent being the absence of protocols and commercial agreements between the Egyptian government and the governments of the target markets, as well as the problems of difficult transport, random exportation, and the lack of commitment toward the requirements of each importing country.

Al-Demerdash said that the areas of lands in Egypt are estimated to be 9.6m feddan, including 6.5m which are old ones, and provide 30% of the exports, while the remaining percentage is provided by new lands.

He pointed out that fruits and vegetables are the most prominent crops that Egypt is self-sufficient in their production, through generating 22m tonnes of vegetables, and 12m tonnes of fruits.

Al-Demerdash praised the idea of creating an Egyptian agricultural environment in African countries, in order to meet the needs of the local market, as well as the exports’ demand.

He then spoke about the system of coding farms and considered it an important step to improve the situation of exports, as they control the transportation of exports and ensure that they are commensurate with the requirements of each market.

Al-Demerdash pointed out that the conditions of Egyptian exports were good until two years ago, when a crisis occurred in the US because of the Egyptian exported strawberries, which were claimed at the time to cause hepatitis A. 

“Afterwards, the importing countries channelled the Egyptian exports into advanced inspection labs, in order to ensure the safety of the food before it enters their markets,” he explained.

Moreover, Al-Demerdash went on to explain that many producing markets have banned a group of five Egyptian crops, namely strawberries, peppers, pomegranates, guavas, and grapes. 

As a result, the government issued decision number 670 of the year 2017 between the ministries of agriculture and industry in order to determine the standards for farms, and to follow up on the production processes of the food which is to be exported.

According to a report issued by the Central Department of Agricultural Quarantine at the ministry of agriculture, the list of agricultural products exported by Egypt last season included citrus; potatoes; onions; strawberries; white beans; peppers; cucumbers; pomegranates; eggplants; mangoes; garlic; guavas, and grapes.

The report indicated that citrus exports reached 1.7m tonnes during the last season, compared to 1.5m tonnes in 2017. The quantities exported were as follows: 764,000 tonnes of potatoes; 369,000 tonnes of onions; 155,000 tonnes of pomegranates; 101,000 tonnes of grapes; 40,000 tonnes of mangoes; 24,000 tonnes of strawberries; 23,000 tonnes of white beans; 15,000 tonnes of peppers, and 14,000 tonnes of garlic.

Furthermore, Al-Demerdash said that agricultural exports have an ability to increase annually. Currently, there is more attention paid to African countries through holding special exhibitions for African markets in order introduce them to Egyptian products.

He explained that the sector of agricultural exports is one of the most difficult sectors, requiring certain products to be maintained through the availability of fridges for storage.

The sector is currently considering expanding in South East Asian countries, including the Philippines; Malaysia; Indonesia; Vietnam; Thailand, and Myanmar, given the population density of the countries there, which is up to 600 million people. However, these countries receive only about 100,000-150,000 annual tonnes of Egypt’s agricultural exports.

El Demerdash noted that although European countries have about 400,000 million people, they receive exports from Egypt of quantities up to 800,000 tonnes annually.

On the other hand, Ahmed Madih, head of the maritime transport committee of the AEC, said that the most prominent logistical problems for agricultural exports include the procedures for ships to enter some countries, especially in Africa, and the legislations by which these countries operate.

“There are no cooperation protocols with countries like the Philippines at a time when exporters want to penetrate it, which makes shipping companies go into Hong Kong first, then change the products’ labels in order to enter the Philippines,” he said.

He explained that the amount of Egyptian exports in the Philippines is much bigger than in Hong Kong, although there is no signed protocol with the former. Regarding the selling prices, the price of a carton of Egyptian oranges in Hong Kong is sold at $10, while the same one is sold in Philippines at $25.

Madih emphasised the importance of directly entering markets such as the Philippines in order to benefit from the price difference.

Regarding the African market, he said that the past period has seen many clients from countries such as Somalia and East Africa, especially after the recent Food Africa exhibition was held in Egypt. Notably, a small shipment was sent to Ghana and Nigeria.

Furthermore, Madih said that the markets of Spain, Morocco, and Lebanon have complete control over the African market.

He also referred to the importance of directly entering Africa, instead of entering Spain to reach Ghana for example. Egyptian exports usually head to European ports in order to compete for exporting to the African market.

He denounced the heavy spending on markets such as Korea through receiving its clients in Egypt, while exports to these countries do not exceed two containers.

“It is not just a simple decision to export to Africa. Exporting to new markets require good marketing studies in order to measure the benefits that will be incurred from entering such markets,” Madih added.

Moreover, he also stated that the issue lies within the fact that the majority of exports in Egypt rely on the system of commission for goods, which creates problems in several markets, including Russia, as it is one of the main markets for Egyptian products.

On the priorities of the council, Madih said that there is currently a higher preference over entering the markets of East Asia rather than African markets, given the high population density and the higher prices.

“Yet, this does not mean that the African market is not important, but more time will be taken in order to enter it, and the process of getting familiar with it can take years,” he added.

He said that generally, exports to Africa have started steadily growing, especially in onion crops. This was clear in the growing number of shipments which are being exported to some markets.

Al-Demerdash said that Egypt has many competitors when it comes to agricultural exports, including Spain, Morocco, Turkey, Israel, and some other countries. The problem lies the means of dealing with African countries, and bringing them to Egypt in order introduce them to the system and contract with us.

He explained that the council is working to solve that problem in cooperation with Expolink, in order to organise meetings with exporters from Africa through a dedicated exhibition which will be held in April.

For his part, Khaled Mabrouk, the chairperson of the Egypt Import and Export company, stressed the importance of Egyptian commercial representation offices abroad in order to support exports through introducing Egyptian products, in addition to creating a map of the needs of the markets where these offices exist.

In a related context, Al-Demerdash said that in the future, Egypt must officially join the International Union for the Protection of New Varieties of Plants (UPOV).

He explained that the union includes 75 countries, and aims to protect new varieties of plants of up to 20 years. Countries which are not member states of the UPOV do not have the right to benefit from the technological developments, and the new varieties reached by the member countries.

Al-Demerdash added that the UPOV is an organisation which protects the agricultural intellectual property, and that Egyptian varieties must be protected, serving as a reason for Egypt to join the union.

He pointed out that the grape crop in Egypt has seen a production leap over the past few years, through bringing new seeds to Egypt, and the expansion in its production.

Moreover, he explained that the situation of the lands of the Delta and the Valley has recently changed through the efforts of young people who excel at expanding agricultural areas in villages, bringing their areas to 50 and 60 feddan. There is ongoing communication between those young people and several companies to get them to work together, which already happened in Ismailia.

Al-Demerdash pointed out that this system has improved agriculture, especially through the use of the best pesticides and fertilisers.

On the role of transportation companies in external marketing, he stated that companies can introduce the council and Egyptian exports to foreign clients by identifying their needs and informing the specialised officials of them.

To elaborate further, he explained that transportation companies have the ability to communicate with clients abroad.

Meanwhile, Madih noted that the process of naval shipping to Canada has specifically improved over the past few years as lines were established, making the time taken for exports to reach Canada 16 days, instead of the previous 21 days in 2017, and 36 days in 2016.

On the strategy of the council over the upcoming period, Al-Demerdash said it aims to develop agricultural exports permanently, however, some production and climate conditions play a role in limiting this.

Moreover, he explained that the volume of annual contracts is based on the Egyptian supply and foreign demand. Some years see a leap in some products, while some others witness a decline.

“The season of exporting citrus fruits started in December. We have a problem with exporting to some European countries, given the recent increase in the production of the EU countries, including Spain whose production increased by 20% with the start of this season,” Al-Demerdash added.

Regarding his expectations of the most prominent Egyptian exports in the future, he said that citrus fruits will remain the top products. Tomatoes and herbal plants will also play a major role in developing exports over the upcoming year and will be the sector’s “dark horse.”

Furthermore, Al-Demerdash also added that the state’s project to establish 100,000 feddan of greenhouses will play a major role in this regard.

Saeed Abdelrahman, the general manager of Egypt Import and Export company, demanded reducing the wasted amounts of vegetable and fruits, which represent 40%. He added that if this happens, it will help in exporting more of the production, and will also lead to a decrease in prices.

He explained that his company’s exports reached 1,700 tonnes last year, and the company aims to export 4,500 tonnes this year.

Finally, Abdelrahman said that his company is working on developing a production station to reduce the freezing period. He pointed out that his company exports its products to Russia, Ukraine, Saudi Arabia, Oman and Israel.

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https://dailyfeed.dailynewsegypt.com/2019/02/06/egypts-agricultural-exports-opportunities-challenges-lying-ahead/
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