'Dubai is the new Rotterdam' with cold storage, says marketer
A South African marketer has warned citrus exporters not to take any chances on quality in the Middle East this year, with local produce hanging around for longer and higher standards set by importers.
G.F. Marketing director David Pearce, whose company specializes in the region with South African and Chilean fruit, says 'maximum caution' is advised even though the citrus market outlook is good.
"Storage of Egyptian oranges could lead to them being in the Middle East market for longer at much lower prices with acceptable quality," he says.
"There is less trading than before; don't take a chance with sending too much fruit without a home as they only buy what they can sell.
"Dubai is the new Rotterdam with extra cold storage, so be careful - prices of fruit will then be determined once fruit is on the way only, which can be dangerous. Reputable receivers are very conservative and high opening prices are unrealistic."
He says the market will still pay well throughout the season with late varieties doing better, while importers will likely be more discerning on quality
"From week 1 until week 12 this year, South Africa exported 20% more apples and pears to the Middle East versus last year during the same period - expect this to be a trend for citrus as well.
"Only the top quality suppliers will do well this season as the general suppliers from South Africa will put a variety of different qualities into the market as per usual, and those medium to low quality suppliers will be penalized."
Outlook by fruit category and origin
Pearce highlights South African exporters will need to focus on improving their image problem in the region.
"Middle Eastern importers are not happy with South African Citrus. The South African image has been damaged over the past couple of years, and don't expect a premium for early navels; that was five years ago when Egypt was not a player in the early orange market, but that's not realistic anymore.
"Egypt will be able to deliver good quality Valencia's at US$7 FOB (freight on board) in our (South Africa's) early season. Do your sums and deliver the right quality to avoid expensive claims.
"Don't take risk on class 2 fruit as one could damage the image of class 1 fruit. Look at the juicing price as well."
He adds that Egypt's Valencias are currently selling well, with Spanish Valencias out of the market.
Pearce's current forecast is a peak opening price of US$9 freight on board for South African oranges, but emphasizes this will need to be revisited closer to the season.
He says only the earliest of South African lemons are currently in the marketand hold a good reputation with importers, while direct competition will be with Argentine lemons on consignment. At the moment there are still volumes of Jordanian lemons in the market, selling at low price levels.
He says the easy peeler market is currently supplied by good quality fruit from Pakistan and poor quality from Spain, while fair volumes of U.S. late lanes have been shipped and are still on the water.
Iran is still not an option for South African exporters and Iraq is also generally out of the question.
"The (Iraqi) borders with Kuwait and Jordan are closed, meaning very difficult entry."
Related story: Iraq fruit import restrictions to cause Middle East overload
Photo: Flickr, Dominic Sayers