Market Assessment

Prospects and challenges for refrigerated container transport of fruits and vegetables from Ethiopia to the Middle East, Wageningen, 2008

    This report offers an overview of the feasibility to use refrigerated container transport for Ethiopian fruit and vegetables export to the Middle East.

    Methods for info gathering
    The feasibility study of setting up a refrigerated container transport from Ethiopia to the Middle East consists of information collection on the practical feasibility and on the economic feasibility. In order to do the calculations it was necessary to select a few fruits and vegetables due to time and cost limitations. This feasibility study conducted the following steps to gather data:

    A. Interviews with Customs, Port authorities and the Ministry of Agriculture to get knowledge of the current rules, formalities, official requirements and overall view. Phytosanitary data has been gathered through desk research;
    B. Interviews with transporters (inland and sea), technicians (cooling facilities, materials handling, physical distribution), exporters and importers to indicate current and potential possibilities and a more detailed view;
    C. Data collection on production, current demand and market requirements to know the potential and the technical requirements;
    D. Data collection on costs involved throughout the whole chain;
    E. Monitor possible challenges and technical issues from previous and current experiences (also in other countries) and profound expertise and knowledge of logistics and cooled chains;
    F. Verify findings during the seminar on Ethiopian perspectives for and implementation of refrigerated container transport

    Summary of results
    The Middle East is an interesting market for Ethiopian fruit and vegetables with some possibilities to enter. Sea transportation is becoming more and more interesting due to the decreasing capacity in air transpiration and much lower environmental impact (and possibly costs). Ethiopia's current fruit and vegetable production is low, but the country has potential to increase a wide range of products throughout the year. It is required to have good quality to be able to enter the export market and to compete with other exporting countries. Reefers will ensure maintenance of quality during transportation. The quality of the produce should be high from the very start. It is therefore recommended to carefully select the seed or seedlings and have proper production and post-harvest technologies.

    Exporting fruits and vegetables from Ethiopia to the Middle East and in particular to Saudi Arabia and the UAE over sea by using reefers is practically feasible. For sea transportation it is important that the produce is continuously in the optimal environment. The fact that a closed cold chain is feasible -the container does not to be reopened during transportation- is therefore positive. The reefers are currently not available in the country but can be imported, including the required gensets. However, the costs of importing the reefers are high, resulting in relatively high costs to get the fruits and vegetables cool in the port in Djibouti. In order to make full (economic) use of a container you need to be able to load it completely. Therefore the reefers are yet a feasible option for largescale producers but not yet for smallscale producers who would need a fresh consolidation centre. It is recommended to organise such centres who can receive fruits and vegetables from different farmers, offer cold storage possibilities and fill a container efficiently.

    The economic feasibility of using reefers for exporting fruits and vegetables depends very much on the type of produce and the negotiated market price. In any case it will be more positive for fruits and vegetables which can be packed efficiently and therefore fill a container with a higher tonnage. The market price is always based on a weight basis and as most container transportation costs are based on a volume basis it is profitable to have a high weight in one container.