One of the world’s main producers of oranges, Egypt is also the second-biggest exporter of the fruit. Oranges account for 30% of fruit production and 65% of citrus production, according to the US Department of Agriculture’s Foreign Agricultural Service (FAS).

Production Rising

Egypt was forecast to produce around 2.5m tonnes of oranges in marketing year (MY) 2013/14, up 120,000 tonnes or 5% from MY2012/13, the FAS said in its annual report on the country’s citrus industry. This boost comes from the expansion of area planted and harvested, and a rise in the number of fruit-bearing trees as Egypt’s citrus sector has grown. This will mean that Egypt will remain the world’s sixth-largest orange producer, behind Brazil, the US, China, the EU, and Mexico, and ahead of Turkey, Morocco and South Africa, which often target similar markets.

The total area under orange cultivation rose by 2000 ha to 115,000 ha by the end of MY2013/14, the FAS estimates, with the number of fruit-bearing trees increasing by around 200,000 to 9.1m. This represents a good recovery after a dip in area cultivated and producing trees in 2012/13, when high summer temperatures and aphid infestations lowered production. Fruit flies have also been a problem for Egyptian exports, including to Russia and Ukraine. Some markets now insist on cold treatment to approve imports, while the government has been rolling out a crop protection programme to tackle the issue.

Varieties

Oranges are well suited to Egypt’s climate and grow across the country, but groves are heavily concentrated in the Nile Delta, particularly the Qalyoubia, Beheira, Sharqiya, Ismailia and Menufia governorates. Some 60% of the fruit produced are naval oranges of two varieties: early maturing, largely sold on the domestic market; and late maturing, which are predominantly for the export market. Other types include the baladi (“country”) oranges, blood oranges and khalily oranges, all of which are used for juice. Valencia oranges are mainly used for juice, but some go to “table” consumption, while the sukkari is a sweet table variety.

Export

The FAS estimates that Egypt’s orange exports in MY2013/14 reached 1.1m tonnes, up 10% from 1m tonnes in 2012/13. The organisation states that the increase came largely from a rise in output, suggesting that, for the time being at least, there is enough demand on the world market for Egypt’s growing production. The increasing output has also helped keep prices competitive. The biggest export markets for Egyptian oranges are the EU, Russia, Saudi Arabia, Ukraine and the UAE. Russia is the single biggest purchaser, taking around 25% of Egypt’s total exports. This proportion may even rise in 2014, as Egypt has moved to strengthen trade ties with Russia, and Russia in turn has looked to diversify its import sources.

Export Upsides

The outlook for future external demand is similarly positive, with markets continuing to open up as confidence in Egyptian citrus rises; some countries had blocked imports from Egypt over pest risk. In August 2013, the US lifted restrictions on orange and tangerine imports from Egypt, following a similar move by China. In January 2014, Russia lifted a ban on 10 Egyptian companies exporting citrus fruits. While logistics costs of exports to the US and China are clearly higher than those to Europe, and there is substantial competition from domestic production in these countries, the opportunity to sell to growing markets can only be an upside for Egyptian citrus sellers. The relative weakness of the Egyptian pound also renders the country’s products more affordable globally.

Egypt is not the only country looking to expand on a growing international market, of course. As the FAS notes, particular competitors include Turkey (closer to the Russian market) and South Africa, which produces during Egypt’s summer and can reach markets earlier. As in other agricultural segments, raising the value-added would be beneficial. The FAS estimates that processing volume is about 85,000 tonnes – accounting for just 3.6% of production. Processing more of the fruit would help counterbalance the sector’s seasonality, while creating jobs in the downstream industry.