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Luna Verde achieved €29m in sales last export season: chairperson - Daily News Egypt

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Luna Verde achieved €29m in sales last export season: chairperson

Flotation increases value of products by more than 50% in the local currency


Luna Verde for agricultural crops has achieved sales worth €22m during the export season that ended in July—the same value achieved by the company last year.

Reda El Omari, the chairperson of the company, said his company managed to achieve the same sales of last year in the hard currency, but it achieved an increase of over 50% when calculated in the local currency as an interest from the flotation of the Egyptian pound.

The Central Bank of Egypt (CBE) liberalised the exchange rates of the local currency in November 2016 to take the dollar to EGP 17.85 instead of EGP 8.88 at the time the decision was made.

El Omari pointed out that the current season was good in terms of exports, especially with Egypt offering good produce that attracts the attention of foreign markets.

Moreover, some products have achieved a leap in the volume of exports during that past season as a result of a decline in the marketing value abroad to compete strongly before other countries, with Morocco topping the list.

El Omari noted that the company has not achieved an increase in the sales due to special circumstances in the company and not for marketing reasons or weakness of products. “The upcoming season will be better,” he said.

Italy alone accounts for 60% of Luna Verde’s exports, and the remaining percentage is distributed on the rest of the countries of the EU.

Luna Verde seeks to enhance its presence internationally starting from the upcoming season through being present in specialised international exhibitions, with the aim of increasing the number of customers in EU countries.

El Omari said that agricultural crops in EU countries have been exposed to climate factors that affected its produce in the past season, which encouraged Egyptian agricultural exports in 2017.

He pointed out that several Egyptian products, including broccoli, cauliflower, zucchini, and eggplants, did not witness much demand during the usual times in Europe. However, as a result of its current circumstances, there is an increased demand on vegetables from Egypt.

 

The bad weather has hit many countries that are in competition with Egypt, most prominently Morocco. This paved the way for Egypt to maintain its exports and even increase that of other products.

The demand by the EU continued until late April, which allowed Egypt to compete on exports.

Beans accounted for 44% of the total exports of the company, followed by onions at 13%. The remaining percentage was distributed on nine other products: cabbage, grapes, zucchini, eggplant, pepper of all kinds, garlic, strawberry, watermelon, and peas.

El Omari explained that the company does not rely on the foreign market alone to achieve its annual target. “The exported amounts are determined by the foreign markets; depending on prices,” he added.

“The strong competition by some new markets such as Morocco and China have been a reason for the weak exports. Despite the increase, their value declined slightly,” he noted. He added that the global prices of some products were low resulting in a decline in the value of products, which is the main reason for the increase in exports.

The exports of agricultural crops recorded about 3.7 million tonnes until late July compared to 3.5 million during the same period of the past season. The export season in Egypt begins in early September of every year, ending in July of the year that followed.

El Omari said that the agricultural exports are facing several issues which must be eliminated to be developed.

He stressed the importance of increasing control over agricultural exports in terms of quality and efficiency, especially after the crises which some products faced, such as pepper and strawberry.

Saudi Arabia, Sudan, and Emirates have banned some strawberry and pepper produce over the past months due to detecting pesticide residues in some shipments.

El Omari pointed out that the increase of the local production expenses prevents Egypt from competing strongly abroad against other products. The expenses of transportations also have an impact on the production process, starting from seed production companies, to the final produce which reached consumers.

He pointed out that Senegal is a new country in the export market, but has become a strong competitor of Egyptian exports in all markets of the world, where the price of shipping there does not exceed €500, while in Egypt it reached €1000 last year.

Exporters suffer from many financial issues with the Russian market due to their inability to collect dues after the arrival of shipments, which may result in them demanding 70-80% of the dues before shipping.

He explained that the majority of the Russian markets deal in this manner, and the weakness of the Egyptian commercial representation office there is considered a main reason for Egyptians’ inability to obtain dues.

The sector also needs an increase in the efforts of these kinds of representation offices, as many of them do not offer the required services.

He added that exporters can play the role of the representation offices but this will add extra expenses on them. “The country bears the expenses of having these offices there to play their own roles,” he pointed out.

 

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