Egypt's agricultural exporters are seeing a surge in demand and finding new foreign markets only months after the currency was floated, with many rushing to expand capacity to keep up.
Egypt's pound has roughly halved in value since the central bank abandoned its peg of 8.8 to the dollar on November 3, making Egyptian fruit and vegetables look cheap and attractive to foreign buyers, exporters said.
“Demand has doubled, with every product gaining one or two markets,” said Mostafa al-Naggari, Chairman of Fresh Fruit Co, which recently signed deals to ship to China and is finalizing others with Australia, New Zealand and Korea.
Trade deficit a problem
The currency flotation helped Egypt to secure a $12 billion IMF loan to support a wide-ranging reform program aimed at restoring foreign inflows and reining in the budget deficit.
A series of tax increases and subsidy cuts, along with the currency depreciation, have driven inflation to record levels in a country where millions live a pay check away from hunger. But amid the pain of government austerity, local manufacturers and exporters are reporting a pick up in activity.
Egyptian politicians have blamed the import-dependent country's ballooning trade deficit, which stood at $42.64 billion in 2016, for putting pressure on the pound. Along with a sharp reduction in imports, a rise in agricultural exports could help narrow that gap.
Exports of Egyptian vegetables, fruits and legumes amounted to $2.2 billion last year and would likely rise by about 15 percent in 2017 as a result of the float, Abdel Hamid al-Demerdash, the head of Egypt's Agriculture Export Council, said.
The main vegetable exports include onions and artichokes, and fruits include oranges and strawberries.
The growing interest follows a turbulent year for Egyptian produce, with a Hepatitis A scare in North America linked to Egyptian strawberries and a temporary ban of Egyptian fruits and vegetables in Russia, one of Cairo's top buyers.
But traders say growth now comes down to how quickly they can expand to meet demand.
'A golden opportunity'
Japan Food Solutions (JFS), a fruit and vegetable exporter, is working to double its planted area this year to meet an expected 20-30 percent increase in demand on the back of new orders from markets in Europe and North America, senior managing director Emad Said said.
“I see this as a golden opportunity for Egyptian produce to compete more aggressively ... The clever ones will seize this opportunity to enter new markets,” he said.
PICO Modern Agriculture, another exporter, has seen its demand from Gulf Arab countries jump by about 50 percent in the last two months, chief executive Alaa Diab said.
“The flotation has been very tempting and very helpful. It opened the eyes of many importers to come look at Egypt where they can get much more competitive deals,” Diab said.