Oranges grown in the desert are causing a boom in citrus exports from Egypt and making the country one of the world's leading fruit suppliers.
Officials in Cairo say Egypt has become the world's largest oranges exporter by volume, outperforming rivals Spain and South Africa, although these two countries are still generating much more revenue from their oranges exports.
According to the International Trade Center, a joint agency of the World Trade Organization and the United Nations, Egypt exported nearly 1.8 million tons of oranges in 2019, scraping into first place just ahead of Spain. Income from exports was approximately $ 660 million. Coronavirus disruptions earlier this year could cause exported volumes to be below 2019.
"Global orange consumption has grown and Egypt has captured the rise in the market," says Mohamed Abdel Hady, orange grower and exporter who heads the Citrus Committee of the Agricultural Export Council, a trade association.
“Egypt has the advantage of having a cheap currency, which means our prices are competitive. Oranges have made a leap in income for farmers, so they are planting more. "
The Egyptian pound fell sharply against the dollar in 2016 due to a devaluation that was required for an IMF bailout.
Tom Leenheer, commercial director at Van Ooijen Citrus, a Dutch fruit and vegetable wholesaler, says he has “seen more and more Egyptian oranges on the market in recent years. The price / performance ratio [equation] is good. “It is also noteworthy that more and more Egyptian producers are setting up their own businesses in Holland to trade in oranges imported from Egypt.
Most of the country's orange exports come from large farms on reclaimed desert land laid out over the past three decades, rather than from the old fertile fields of the Delta and Nile Valley, where plots are fragmented and farmers cannot afford the necessary investments can export.
Sherif el Maghraby, chairman of Magrabi Agriculture, one of the country's leading fruit and vegetable exporters, said, “Typical land ownership in the Delta is less than an acre. The big investments are all made in the desert. The technology is connected to it, and the farms are big so they can afford to have their own packing houses. "
Private sector investment in desert farms began to surge in Egypt in the 1990s, and according to Maghraby, this was encouraged by Israeli agricultural expertise brought in after the 1979 peace agreement between the two countries. Government subsidies to exporters have also helped the expansion, he adds.
“We are long-term investors,” says Maghraby, whose agricultural business was founded around 30 years ago when his family was looking for a new business after moving from Saudi Arabia to Egypt.
“When we started, most people got out of citrus because old plantations were split up into smaller holdings [over the generations]. However, we have found it to be a serious business that is suitable for long term investment. So we kept buying [desert] land to reclaim and cultivate it. "
His company now exports around 60,000 tons of oranges annually to 58 countries with its main markets in Western and Northern Europe.
China has been a growing market for Egyptian oranges in recent years
According to Abdel Hady, oranges from Valencia, which are used for juice, make up the largest part of Egyptian exports at around 60 to 70 percent. The rest are mostly umbilical oranges, some of which are planted in the ancient lands, but most of which are still from the large farms in the desert.
He says that over the years exporters have learned to produce according to the standards required by the markets – this includes the pesticide level allowed, as well as the selection and grading of the fruit to meet importers' requirements and minimize shipments . "We have also introduced a lot of new high-yielding varieties," he says.
In recent years, Asia, especially China, has been a growing market for Egyptian oranges according to exporters. "All new markets in Southeast Asia represent the future for us," says Ashraf Abou Ismail, General Manager of the Sonac Group, an exporter of agricultural products.
“The population is many times that in Europe. I sell a lot more in China, India, Malaysia and Indonesia than in Europe. In these countries they grow oranges, but at a different time of the year. "
He was a pioneer among the Egyptian exporters who started sending oranges to China eight years ago. Besides Bangladesh, it is its most important market.
“In China, they have some of the highest standards for oranges in the world. They won't accept a single blemish or scratch on the fruit and I have to pre-chill the shipments and remove any fungus or insects before the 24 day trip. . . All of this, of course, increases the cost. "
Exporters are confident that there is still enough room for exports to grow to new markets in Asia. If Egypt could branch out and add “simple peelers” like mandarins and clementines, says Abdel Hady, it would help to gain even more market share: “So when you load a shipment there are many varieties and customers would know that you can deliver anything. "