The Egyptian produce sector has been having a relatively normal season. More opportunities for export have appeared due to access to the Chinese market, which has offset the economic aftermath of the devaluation of the Egyptian pound. Meanwhile, Spain and Italy have been hit hard by cold weather, leading to a severe lack of produce on the European market.
The scarcity of especially leafy green vegetables should have been a great opportunity for Egyptian exporters, producers and traders. But in general, it was not. According to Amr El Beltagy of the grower/export company Belco, this has to do with the strategies that European importers have come to rely upon.
“European importers source their produce 100% from Spain. There has hardly been any trade with other supplying countries, like Egypt, Morocco or Tunisia. This dependency is the sole reason why the current European situation got so out of hand. It would be better if import companies would source 75% out of Spain and use countries like Egypt for the other 25%, like a backup source.”
Belco works with prenegotiated contracts for its European customers, which means that the company doesn’t have any excess produce that could be used to supply European markets. While there are other Egyptian companies trading with Europe on a more ad hoc basis, these companies aren’t necessarily equipped to exploit the current gap in the market. "These companies may lack the required certifications or have produce with a heightened risk for health safety."
Due to the devaluation of the Egyptian currency, Egyptian produce is currently more expensive than Spanish produce. El Beltagy believes that in spite of the more expensive prices, a small amount of trade with Egypt would be better for Europe than no trade at all.
“The Egyptian weather is more stable than in Spain. Sure, Spanish prices are better, but our prices are higher due to the economic situation. This situation could improve if European importers took more Egyptian produce. It would give the Egyptian sector more chance to financially recover, but it would also provide a way for the European market to avoid situations like now with Spain.”
Trade with Egypt would also enable Egyptian growers to increase production up to a point, then it would be feasible to fill the current gap. As no one could have known the cold front would be such a problem, there is now no way Egyptian companies could ever satisfy the current demand. “In order to provide such volumes, you need pre-agreed programs with European customers. That would be the only way to grow enough land,” says El Beltagy.
While it could be frustrating for Egyptian companies to see such a marketing opportunity go to waste, El Beltagy remains optimistic. “The situation really isn’t that bleak. The little extra produce we do have does give us a little more profit than normal. And the prices are better than before.”