Business News: Morocco’s Citrus Shipments Seen Tripling to 1.3 Million Tons – Bloomberg

Bloomberg-Businessweek, by Souhail Karam (June 13, 2013) — Morocco plans to more than triple its citrus fruit exports to 1.3 million metric tons by 2018 as a development program raises output, according to Ahmed Derrab, secretary general of industry group ASPAM.

Aging groves, narrowing margins from sales to the euro-zone area, increased competition from Egypt and Turkey and growing domestic demand eroded exports of products including oranges to key markets including the European Union, Derrab, whose group represents 80 percent of the country’s producers, said by phone yesterday from Casablanca. Morocco was the fourth-biggest provider of citrus fruit imports into the EU in the period from 2009 through 2012, according to Eurostat data.

In the 1998-2011 period, Morocco’s total citrus exports averaged 528,000 tons a year, according to finance and economy ministry data. In the period that started in October and ends this month, exports fell to 380,000 tons, Derrab said.

“It is one of the lowest export figures we had in 40 years,” Derrab said. “But things will change fast enough for our exports to increase as of next year and continue gradually to reach 1.3 million tons by end-2018.”

The EU, which Derrab said offers the highest margins for Moroccan citrus, accounts for 30 percent of its exports while Russia takes 50 percent, with the remainder going mainly to the U.S., Canada and Saudi Arabia.

“We went to Russia because it was easy to penetrate as a market,” Derrab said. “But it’s not healthy as we run the risk of being too dependent on it and politics may change in a way that can hurt us.”

EU Market

“Our aim is to reposition ourselves on the EU market,” Derrab said. “We also hope to explore other profitable markets but our ports are not well connected enough to go far and wide. Logistics costs therefore become prohibitive.”

Midway through a $1 billion, government-backed industry development plan that started in 2008, Derrab said its execution is ahead of schedule. The plan provides for a 33 percent expansion of citrus-planted areas to 122,000 hectares (301,469 acres), and an increase in production from 1.2 million tons to 2.9 million tons.

“As far as the rejuvenation and extension of our citrus groves are concerned, we currently meet the objectives that were initially set,” Derrab said. “But we need to move faster on the logistics front to ensure the expected increase in production will be worth the investment effort.”

To contact the reporter on this story: Souhail Karam in Cairo at skaram5@bloomberg.net

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