Over the past few years, Egypt exported between 90K and 100K tons of pomegranates annually. However, the total exported volume of pomegranates has declined during the past 2 years, due to the new rules set by the Agricultural Export Council. With the new rules, the council now controls and monitors each export deal, as the government wants to ensure the quality of Egyptian exports.
The Egyptian government aims to boost the export of Egyptian agricultural export through these rules. Before the implementation of these new regulations, several countries had imposed bans on some agricultural products from Egypt, due to high levels of harmful pesticides. The implementation of these stricter quality regulations is meant to help Egyptian exporters penetrate markets with stricter phytosanitary requirements, such as Japan, China, and Europe.
These new rules apply to 5 different products: grapes, strawberry, guava, pomegranate, and capsicum. All products destined for export have to undergo strict analysis to ensure that no harmful pesticides were used. The products are monitored from planting until export, meaning that the soil will be analyzed, the farms and packhouses are checked, and the products themselves are analyzed as well. Only the farms that do not use hazardous pesticides will be certified by the government and will thus be able to export pomegranates.
These rules are beneficial to importers of these Egyptian products, as it ensures their quality. For exporters, however, they sometimes provide problems. As McCoy Int’l Trading Co. LLC, an Egyptian exporter of pomegranates, mentions: “For example, if you got a deal and it is weekend, you cannot act until the Agricultural Export Council opens (Sunday to Thursday 8 AM to 5 PM) to get the proper license or documents. We have lost airfreight deals because of this issue.” The Egyptian government is, however, aiming to improve agricultural exports. The quality measures are meant to make Egyptian exports more attractive to importers. The Egyptian government also offers subsidies and tax breaks to farmers and exporters to promote export.
The current FOB prices for grade A pomegranates, the type exported by McCoy Int’l Trading Co. LLC, currently range between 720 USD and 820 USD per ton. Prices are expected to go up due to these new government regulations. The company estimates that prices will rise by around 15%, due to increased expenses for laboratory tests and certificates. However, McCoy Int’l Trading Co. LLC is certain that the European Union will increase its imports since the quality of Egyptian pomegranates is higher due to the new rules set by the Agricultural Export Council. The stricter quality regulations have already opened up the Chinese market to Egyptian grapes.