In the 2023/24 season, Egypt is set to export one of its smallest volumes of oranges to Southeast Asian countries, yet it will remain a key player in the regional market, according to EastFruit.
From November 2023 to May 2024, Egypt exported only 42,000 tons of oranges to key Southeast Asian countries (excluding Hong Kong and Vietnam), marking one of the lowest figures in recent seasons. The most significant decline in Egypt’s presence in the region was recorded in January-February, during the start of the active orange export season.
“Unfortunately, the blockade of the Red Sea by Yemeni Houthis dealt a serious blow to Egypt’s orange supplies to Asia at the very beginning of the season. Although Egyptian exports somewhat recovered in March-April and even reached a record in May, time was lost. As a result, for the first time since the 2019/20 season, Egypt risks facing a significant drop in the volume of its orange supply to Southeast Asian countries,” commented Yevhen Kuzin, Fruit & Vegetable Market Analyst at EastFruit..
Egypt had every chance to strengthen its position in this region this season. FAS USDA analysts expected a record orange harvest in Egypt this season and, accordingly, a record export of these fruits from the country. In turn, the demand for oranges in Southeast Asian countries would have been fueled by the region’s rapid economic growth, a developing consumer market, and a thriving tourism sector.
Instead, the Red Sea blockade temporarily closed the Asian market for Egyptian exporters, and prices, which were already relatively low due to the devaluation of the Egyptian pound, fell even further. In April, for example, despite the recovery of supplies to Asia via a bypass route around Africa, oranges on the domestic market in Egypt were offered at an incredibly low price of about 15 US cents per kg.
“Excluding Hong Kong, Southeast Asia set a record for orange imports in the first seven months of this season, but Egypt had little influence on these events. Instead, the growth in supplies was almost entirely due to increased exports from China, which has already exported more oranges to Southeast Asia than Egypt, although it was previously only in fifth place among suppliers,” continues Yevhen Kuzin.
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China and the USA are key competitors for Egypt in the region, as the other two largest suppliers (South Africa and Australia) are present in the Southeast Asian market from June to November. Imports from Australia annually fluctuate between 29,000 and 36,000 tons, while South Africa supplies the region (excluding Vietnam and Hong Kong) with 45,000 to 74,000 tons of oranges, competing with Egypt for the top spot among suppliers. By the end of the previous 2022/23 season, Egypt was the leader (62,000 tons), and South Africa took second place with 58,000 tons.
“China, in the first seven months of this season, exported three times more oranges to the region than in the entire previous season, managing to occupy the niche left by Egyptian products. At the same time, US exports have almost halved over the past five seasons to 20,000 tons, and this is a fact that Egyptian suppliers should pay attention to. It will be increasingly difficult for Egyptian suppliers to compete in the cheap segment with Chinese oranges, and they will not be able to lower the price of their products indefinitely. In turn, the gradual withdrawal of the USA from the Southeast Asian market creates excellent opportunities for premium orange exporters, and in this segment, the factor of increased logistics costs is no longer critical,” concludes Yevhen Kuzin.
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