Fresh Fruit Co. aims to increase its exports this year to EGP 66m compared to approximately EGP 60m recorded in 2015, representing a 10% growth.
Mostafa El-Naggari, Chairman of Fresh Fruit Co, said the company’s total exports increased by 9% last year, noting that opening the door to rice exports in 2015 was the main reason behind the increase in exports.
He also anticipates a boom for Egyptian exports by the end of the current season. Last season witnessed a decline, he said, pointing out that many new markets will aid the development process.
El-Naggari went on to note that tensions in Turkish-Russian relations will have a positive impact on many crops exported from Egypt to Moscow in the near future.
He explained that Turkey exports approximately 350,000 tonnes of tomatoes to Russia annually, while Egypt is the fourth largest producer of tomatoes. This means that Egypt is more competitive compared to other countries, such as China, which currently competes with Egypt in this field
The Export Council for Agricultural Crops and the Exporters Division sent a memorandum to the Ministry of Industry and Trade calling for the establishment of roll-on/roll-off (RORO) lines between Egypt and Russia, El-Naggari continued. These transport lines would support Egyptian exports, especially since the crops of which the council intends to send higher quantities to Russia – such as tomatoes and potatoes – require this type of transportation means because they are quick to spoil.
RORO lines boast features that other normal shipping lines don’t have, including faster speeds and no stops before the destination port. However, the associated costs are high, which requires that regulations be set for transport via RORO lines in order to cover the cost of construction.
El-Naggari moreover called on the Ministry of Industry and Trade to develop a clear programme for export subsidies. He said the current programme simply came in response to exporters’ complaints of the burdens faced following the increase in interest rates on the loans required to export goods, which in turn affected
The current subsidy programme implemented by the government provides 10% of the value of exports to exporting companies.
He further emphasised the importance of creating an incentive plan for exporters, re-operating stalled factories, expanding the construction of logistics areas, and removing obstacles for exporters, which will help create new jobs to eliminate the growing youth unemployment.
El-Naggari said agricultural exports fell by 20% last year due to the political turmoil witnessed in a number of Arab countries that are vital to the Egyptian market.
He explained that the drop in vegetable prices on the global market, following a decline in transportation and production costs due to low oil prices, obstructs the Egyptian market’s ability to achieve its goals.
He added that the decline in foreign currency prices in markets that rely on Egyptian products – most importantly the euro and the rouble – constituted another important obstacle.
He went on to say that the Central Bank of Egypt’s (CBE) policy to set a cap for dollar deposits, which was introduced in February 2015, resulted in crises for many factories, alongside the losses incurred by their clients abroad.
The higher prices have pushed foreign markets to reject Egyptian rice, and the total quantity of rice exported since last October is only 25,000 tonnes. Moreover, a surcharge of EGP 2,000 is imposed on each tonne exported.
He explained that the quantities that have been exported until now have gone to Arab markets, particularly Saudi Arabia, Lebanon, Syria, and Jordan.
El-Naggari noted that rice prices have been steadily increasing since the beginning of this month, rising to EGP 3,400 per tonne from EGP 3,100 without justification.
He explained that some traders and farmers have moved toward stockpiling production in order to regulate prices, and that the state’s failure to purchase crops from producers has helped merchants to manipulate prices.
Current stocks of barley rice amount to 4.5m tonnes, equivalent to 2.8m tonnes of white rice, which is expected to provide a surplus for the next season, which begins in August.
Moreover, El-Naggari rejected the idea of reducing fees imposed on rice exports in order to ensure that local prices stabilise, pointing out that rice is one of Egypt’s most important strategic crops.