The Middle East has been experiencing wars and negative media that has led the world to perceive it as unsafe. But it’s not just the Middle East that has been experiencing hardships, the rest of the world has been having its fair share of crises this year. We see fluctuating currencies, crashing industries and bankrupt companies in every corner of the world.
According to Khaled Al Mazrouei of Abu Dhabi Co. and Sarahfruits, “The past few years have been tough for my farm business in Egypt. Despite being ranked one of the top farms in Egypt, where I produce various fruits and exports millions of tons per year, I still experience hardships."
"A lot of importers who purchase produce from me usually pay around a 70% down payment and I’ve been having difficulties collecting their 25-30% balance. Typically for the down payment we experienced 1 -2 weeks delay in the past, but now even the down payment is delayed for a longer period of time and the buyers have a difficult time in paying the balance."
"Several companies, especially in Europe such as Germany, Scandinavia, The Netherlands and Italy have been defaulting on their payments – on my end I’ve had to file law suits against these companies. In total I have 6.8 million euros that have not been received from Europe. Big exporters and farms all over the world have been affected by different events.”
The demand and the market is ever changing. “I’ve been seeing diminishing orders. A few years back my company used to deal with around 10 -12 distributors. This year I’ve only been dealing with 3. Some of it could be attributed to the war in the Middle East that has affected both the producers and customers. Politics and fluctuating currencies are affecting trade and prices for US and the UK. The cost of producing and exporting has risen by 27-28% because of the global market. There is too much supply: the market is also flooded with cheap and below quality fruits from countries in Asia such as India. Super market chains in Europe have adapted to the new pricing. Even in Dubai where a kilo of Mango used to cost 1 dollar, now it costs 35 cents. Competition is cheaper and production has risen. Trying to compete with cheaper goods from the competition has pushed my profits down. In summary my farm has been operating on a 17% loss”, Mazrouei adds.
Although Mazrouei's farm is in Egypt, his exporting and distribution company is based in the UAE. Farms are not making money but the retail industry is. Despite the wars in the Gulf, Mazrouei has been able to import and resell goods from Syria, Lebanon, Jordan, etc.
"The demand for vegetables has not been doing well. Doing business with Europe has not been good across the board. The Egyptian market on the other hand is not performing well, as it has recorded a 20% loss. Morocco has been exceptional because of my strong network in that country. It’s in Asia and the Middle East where I’ve had success with distribution," says Mazrouei.
Because of all that is going on in this world, people can’t think of eating and buying. Their priorities have shifted and the market has changed. “People have stopped caring about quality and are only looking at costs, which is bad for the producer. Big retail chains like Carrefour and Tesco have started closing their larger stores and have created smaller stores. I’ve created an algorithm for myself which has led me to a 29 – 32% growth. Thus, I am focusing my efforts more on my distribution because this is where I am making money”, Mazrouei concludes.
