Last year's Egyptian potato crop was large, and the abundance of supply made it difficult for growers to unload a lot of their product. This year, the crop is expected to be significantly smaller, and though that will make for better domestic prices, export prices will likely remain low.
One of the problems on the export market has been worldwide decreasing demand for fresh potatoes, explained Hesham El Naggar of Daltex in Egypt. Although overall consumption of potatoes has continues to climb, that growth is largely due to more demand for processed potato products, like fries, chips, ready made meals and convenience foods. With plenty of fresh supplies still on the global market, foreign markets remain tough to crack.
“Every country is protecting its producers and reducing the amount of imports they receive as they tend to consume local production,” said Hesham. That's the case in all European countries, where buyers prefer European potatoes.
Stringent regulations for shipping product to the European Union also limit what gets exported. Egyptian growers have had to adapt to changing food safety and production standards, and though Hesham insists Daltex has been focusing on evolving standards for quite some time, more regulations are just more hurdles exporters have to deal with.
“As it becomes more difficult to meet European requirements, production costs go up,” said Hesham. “So you have to improve efficiency, reduce waste and increase yields. You also have to look for new varieties.” In addition to better yields and improved disease resistance, new varieties also serve a marketing purpose. Daltex ships to Europe, Asia and the Middle East, and evolving tastes require constant improvement in the types of potatoes available for purchase.
Emerging potato-producing countries – like India, Pakistan and Bangladesh – might not have the wherewithal to satisfy the latter market's demands, but Hesham believes those countries will eventually improve their growing techniques and contribute even more to the global supply of potatoes.
“We are approaching the market with caution,” said Hesham. “We reduced volumes in Egypt, so we'll have a stronger local market. But I don't think we'll be able to get high prices in Europe.” Daltex' annual production is about 300,000 tons, of which 200,000 are for exports, and with reduced demand for fresh product, he knows his company will have to take advantage of every angle he can to sell those 300,000 tons.
“As a company, we are always advancing,” said Hesham. “We're conserving more water, expanding production into pristine lands that don't require as many pesticides, we're using more solar power and we're taking many steps to increase food safety. We also have an organic line, and though the growth of organic is slow, the growth is steady.”
