Opinion: Middle East fruit sales constant despite upheaval
By G.F. Marketing director David Pearce.
From a South African and Chilean perspective I can report that the Middle Eastern markets are, for the most part, stable this year. Certain products are struggling but mostly everything is selling at an even pace. The question that is most asked these days by people wanting to know about the region is, 'what about all the troubles in the Middle East and how does it affect sales?'
The answer according to all customers is, 'it's business as usual, the people still have to eat', so political unrest does not affect the fruit and vegetable trade with regards to daily consumption.
Iran is perhaps the most unstable market in the region given that the government changes the protocols for imports at a whim and it causes the market prices to fluctuate wildly and, of course, causes the importers to lose money on a regular basis.
Dubai, U.A.E. is, as always, the hub of the region and up to 50% of the produce that arrives there is re-exported to other destinations. This market has been doing well and is a good barometer for the region. Saudi Arabia is always a good market for produce and absorbs vast quantities, although this year there has been a slowing down of the levels of produce sold there due to increasing inflation.
Egypt, whilst it did come to a standstill on imports and exports during their three-week revolution, has returned to normal and trade is steady there. Jordan, which is also a conduit for Syria, Iraq and Lebanon, has been a good market for all fruits throughout the year. Kuwait, accordingly in its role as another conduit for Iraq, has been a slower market this year.
Qatar, Bahrain and Oman are steady markets and little change has been seen in the market over the previous year. Azerbaijan, which dropped its monopoly policy in March, has been a good market.
More and more, fruit producers are looking at the Middle East as a market to move fruit into and this has caused, over the past two to three years, an influx of fruit into the hands of small, medium and large importers/wholesalers (both established and experienced), which has caused instability with regard to pricing in any given market.
The Middle East is not all dominated by the supermarket/retail trade and the majority of fruit sold is still through the ‘wet markets’. The retail trade accounts for a maximum of 20% to 25% of imports. What is important to note is that with the greater influx of fruit there has been varying standards of quality arriving in the markets, and this has led to greater demand from the buyers for a higher quality then ever before.
In other words, the buyers have become more discerning regarding quality and appearance of the fruit that they are buying. Here is a breakdown of how the different fruit categories have gone recently:
Fruit from the Northern hemisphere took long to finish and this affected new season fruit from the Southern hemisphere, particularly the Royal Gala variety. Sales of Royal Gala have only picked up from mid-May onwards; the Golden Delicious and Granny Smith varieties were also affected but not to the same extent.
Current sales pricing: Royal Gala US$21.50– US$24.50, Granny Smith US$21.50-US$23, Golden Delicious US$20-US$23, Red Delicious US$22-US$25.
Pears have sold well in this market with the fastest sales and most demand coming for bi-colored varieties. Sales have been normal for green pears such as Anjou and Packham, while the Abate Fetel is the newest variety to be sold in this region and is gaining in popularity. Overall, pears are in demand constantly.
Imports of Chilean kiwifruit have increased this year compared to last year and are currently selling between US$5.75 and US$6.25 for a 3.2kg tray. New Zealand (Zespri) supplies the most fruit from the Southern Hemisphere.
South Africa dominates the Middle East market supply from the Southern hemisphere, as they they are geographically best positioned to deliver in the fastest time. Volumes shipped to the Middle East in 2011 is mirroring 2010 shipments with the exception of grapefruit, where 60% more has been shipped.
Out of South Africa's total volumes to date, 29% of oranges, 38% of lemons, 2% of grapefruit and 8% of soft citrus have been shipped to that market. Grapefruit has been oversupplied as previously predicted and returns are very poor. This is due to there being a large amount of smaller fruit being available this season.
There is a small amount of Argentinean citrus making its way to the market but otherwise, nothing from South America. Australian citrus lands after South Africa and are generally regarded for the late market.
Current sales pricing: Navel Oranges US$13, Valencia Oranges US$13, Lemons US$19, Star Ruby Grapefruit US$12.25, Soft Citrus US$14.
Stonefruit and Grapes
Stonefruit and grape supply from the Southern Hemisphere is finished, after what was overall a good season for the marketplace and the suppliers.
What do exporters need to get the maximum benefit in the Middle East, and what challenges do they face?
My view on this question is that exporters must realize that the Middle East is every bit as important as the other major markets around the world; the population in this region is on average very young and they, by the nature of their culture, eat a lot of fruit consistently. The Middle East will not return the highest prices but will also not dip to extreme low prices year on year.
The challenge that exporters face regarding the Middle East marketplace is to pair up with the correct importer for their needs, working as directly as possible to avoid dealing with brokers and to view the business on a long-term basis.