CHAPTER III: THE ECONOMIC IMPORTANCE OF DATE PRODUCTION AND INTERNATIONAL TRADE

By André Botes and A. Zaid
Date Production Support Programme
Updated by Pascal Liu, FAO

1. World production and trade

Date production is a world agricultural industry producing about 5.4 million metric tonnes (Mt) of fruit. The date fruit, which is produced largely in the hot arid regions of South West Asia and North Africa, is marketed all over the world as a high-value confectionery and fruit crop and remains an extremely important subsistence crop in most of the desert regions.

The world production of dates has increased from about 1.8 million tonnes in 1961 to 2.8 million in 1985 and 5.4 million in 2001 (Figure 20). The increase of 2.6 million tonnes since 1985 represents an annual expansion of about 5 percent.

The major date producers in the world are situated in the Middle East and North Africa. Figure 21 reflects the distribution of date palms by country for the major date producing countries. On average over the period 1999-2001, Iran, Saudi Arabia and Iraq had almost half of the harvested area of the world. Trade figures indicate that about 93 percent of the date harvest is consumed locally and that by far the majority of these palms are not of the well-known export varieties.

History shows the date palm is a traditional crop in the old world. It is only in recent years that the date palm has been introduced as modern plantations in USA, Israel and in the southern hemisphere.

In 2001 the top five date producing countries (Table 14) were Egypt, Iran, Saudi Arabia Pakistan and Iraq, accounting for about 69 percent of total production. If the next five most important countries are included, i.e. Algeria, United Arab Emirates, Sudan, Oman and Morocco, then this percentage rises to 90 percent. This clearly indicates that most of the world's date production is concentrated in a few countries in the same region.

TABLE 14
Main countries producing dates

Source: FAOSTAT

Most of the major date producing countries have steadily expanded production over the last 10 years, representing a 43 percent increase over the period 1994 to 2001. Over the same period, date exports increased by only 25 percent. Increase has been rapid in Oman, the United Arab Emirates, Egypt and Pakistan. Conversely, output decreased in Iraq (due to the trade embargo) and Morocco (due to phytosanitary problems).

2. Date exports

In 1998-2000, an average of almost 500 000 tonnes of dates were exported annually with a total value of about US$258 million. When this figure is compared with total production, it is clear that the bulk of the dates produced are consumed within the producing countries. Of the 500 000 tonnes exported, 225 000 tonnes were imported by India, 150 000 tonnes by the United Arab Emirates (UAE) and about 60 000 tonnes by the EC.

The international trade in dates can be volatile. Changes are often associated with political and economic instability in the main producing countries. Unseasonable weather can also lead to production and storage losses.

There was a steady increase in world export, from about 260 000 tonnes in 1961 to 400 000 tonnes in 1970 (Fig 22), followed by a slight decrease until 1980. A sharp decline in exports was experienced from 1981 to 1984 after which exports increased again to over 400 000 tonnes in 1989 and 1990. During 1991 there was a sharp fall in exports again, resulting in a net export of only 243 000 tonnes. This fall is due to the fact that Iraq exported only 20 000 tonnes compared to 248 000 tonnes in 1989 as a result of the trade embargo imposed on it following its invasion of Kuwait in 1990. It is interesting to note that exports from Iran increased from 13 000 tonnes in 1989 to 120 000 tonnes in 1994, partly compensating Iraq's reduced exports.

Fig. 23 shows that the UAE is the leading exporting country in terms of gross exports. However, if imports are deducted from gross exports, the five leading net exporting countries since 1991 have been: Iran, Pakistan, Tunisia, Algeria and Saudi Arabia. Of these five countries, only two, i.e. Tunisia and Algeria achieve high export prices. Their price of US$1 700 and 1 400 per tonne respectively in 2000, is due to their strategy of targeting the high value European markets while Iran, which exports much lower quality dates, only achieved US$240 per tonne in 2000.

Figure 23 shows clearly the dominance of the UAE and Iran in the export market regarding volumes. Figure 24 reflects the export market share during 1998-2000 in terms of volume exported and foreign exchange earned per region. Asia dominates the export market by far in terms of volume, but further analyses show that North Africa has 26 percent of the market in terms of value, while it represents only 8 percent in terms of quantity. This is a clear reflection of North Africa's strategy to target the high value markets of Europe. Asia on the other hand is exporting lower quality dates at much lower prices, mainly to India. Europe, predominantly France - a non-producing region - has 5 percent of the market share through its re-exports of dates originating from North Africa.

Knowledge of prices, of pricing patterns and the capacity to analyse the economic forces that cause and change those prices will be a necessary condition to help make effective marketing decisions.

There is a wide variation in the average export prices achieved by different countries (see Table 15). Higher export prices are achieved by Israel, Tunisia, United States and Algeria, which have developed a specific export strategy, to grow top quality varieties and target the higher priced European markets. These high prices are achieved by growing varieties such

TABLE 15
Export prices achieved by leading exporting countries

Source: FAOSTAT

It is interesting to note the price that France achieves on its re-exports mainly to other European countries. France's strategy is to import good quality fruit in bulk and then repack in Marseilles into "glove boxes" for the higher income market.

The major exporting countries in terms of volume, i.e. Iran and Pakistan, achieved much lower prices, US$240 and 377 respectively in 2000. The majority of their fruit that is exported is sold in bulk for the market in India.

3. Date imports

World date imports varied greatly over the period 1961 to 2000. In 1961 world date imports were at 285 000 tonnes and reached a high of about 440 000 in 1973. The world market then experienced a decline and only 180 000 tonnes were imported in 1984. Thereafter imports increased gradually to reach 400 000 tonnes in 1989 and continued to rise to reach approximately 500 000 tonnes per year in 1998-2000.

Table 16 reflects five-year averages of date imports (gross) for selected countries since 1961. The main importers are India, the United Arab Emirates (UAE) and Europe. The top five countries to import dates during 1996-2000 were India, Pakistan, Malaysia, the United Arab Emirates and the European Community. For the five-year period 1996 to 2000 India imported on average 213 000 tonnes while the UAE imported 139 000 tonnes, accounting for 28 percent of the import market. However, the UAE also increased its exports in the late 1990s. While the UAE was a net importer until 1996, it was a net exporter of dates in 1997, 1998 and 1999 (net exports of 15 000 tonnes in 1999).

TABLE 16
Date imports for selected countries: 5 year averages since 1961

The European Community imports an average 60 000 tonnes annually. The total value of imports for European countries is in the order of US$110 to 130 million annually. France alone pays between US$40 and 45 million per year for its imports. The total value of European imports does, however, not reach the producing countries. It is estimated that about one third of all the dates imported into France are re-exported at a value of about US$20 million annually to other European countries.

Figures 25 and 26 illustrate the import market share of the major importing countries during 1998-2000 in terms of volume and value of date imports. Although India's imports were 36 percent of the total volume traded, it represented only 15 percent of the market in terms of US dollars paid for date imports. France and the UK contributed 20 percent to world trade in value while they imported only 6 percent of the total volume traded.

European countries like France, Germany, the UK and Italy import much more expensive and, hence, higher quality dates. In contrast, countries such as India, the UAE and Malaysia import much cheaper and lower quality dates.

In the SADC Region it is mainly South Africa and Kenya that import dates. Preliminary investigations showed that dates being imported into South Africa are of a lower quality, imported in bulk, and are mainly being processed for the baking industry. Figure 27 shows a definite decline in volumes being imported into the SADC Region during the period 1961 to 1996, and a stagnation at the level of 1 500 tonnes per year since then.

Figure 28 gives the general trend in world export prices (using the unit value of exports as a proxy for prices). It reflects the effect on prices of an increase in bulk exports of lower quality dates.

According to the TradStat Trend Report, the average export price per tonne in 1996 was in the order of US$3 100 in the case of France (re-export) while Algeria and Tunisia achieved US$3 500 and US$2 600 per tonne respectively.

To confirm these statistics, prices were obtained from a number of markets and agents in Israel, and are summarised in Table 17.

TABLE 17
Farm gate prices for export quality dates in Israel in 1996 (US$/kg)

Source: Study Tour Report; 1996

Prices varied greatly according to the variety, quality, season, type of packaging and market destination.

According to Israeli farmers in 1996 dates were the best crop and financially outperformed any other farming activity, especially under harsh climatic conditions. In the case of an Israeli farmer, 1 ha of dates of the Medjool variety ensured in 1996 an average income of US$37 800 per annum, based on farm gate-price of US$3 500 per tonne and an expandable quantity of 10.8 tonnes/ha.

4. European markets

The EC is by far the largest date importer in value (over US$100 million in 2000) and the third largest in volume. Within the European Community, France and the UK were the major markets, importing 21 000 tonnes and 10 600 tonnes, respectively.

France

The biggest market for top quality and high-priced dates is France, importing mainly from Tunisia and Algeria. France mainly imports the Deglet Nour variety and all imports are categorised as fresh. As with most of Europe, the main season for date sales is October to December and during Ramadan (see Table 18). The physical quality standards for dates imported into France are comparable to most other European countries. However, the French do tend to rely more on subjective criteria such as texture, flavour and colour than other European countries.

TABLE 18
France's date imports: top 4 supplying countries

The USA has found a new market in France and now competes with the traditional sources like Tunisia and Algeria. It is interesting to note that France's imports during the months of March to August originate virtually all from the USA. The lower price indicates that the dates stored for such a long period are regarded as of a lower quality, or are a direct indication of prices responding to lower demand.

Low volumes of dates are being imported during the months March to August. Date imports reach their lowest mark in July and peak in November. The date market is highly seasonal.

Most of the dates imported into France are packed loose into cartons and transported in containers. Tunisian cartons, the bench-mark for the trade, contain 5 or 10 kg and are repacked into "glove boxes" in Marseilles, one of the main importing centres in France.

In 2000, France imported some 22 500 Mt of dates with a total value of US$39 million. Deglet Nour on the branch is imported from Tunisia for FF. 14/kg in 5 kg, 3 kg, 1 kg and smaller packages. Pre-packed Medjool dates, imported from Israel, were sold in supermarkets (Marks & Spencers) for FF. 75/kg in 1996. Barhee (khalaal) was sold for FF. 45/kg at the fruit stalls in Paris and for FF. 25-30/kg in Marseilles.

United Kingdom

The United Kingdom imports and consumes over 10 000 tonnes annually and it is believed that there are good prospects for future expansion in the date market. Pitted dried dates for processing and home baking account for about 45 percent of the market. The market for dessert dates, either fresh, chilled or frozen, is the fastest growing segment. During 1993, the dessert segment was estimated at 1 000 tonnes while the rest is sold as dried dates. Dates imported into the UK originate mainly from Iran (6 000 tonnes), Tunisia (1 700 tonnes), Pakistan (1 000 tonnes), France (re-exports - 1 000 tonnes) and the USA (1 100 tonnes). Most of the dates imported are from a range of varieties and the market is more concerned with quality in terms of infestation, appearance and moisture levels than with a specific variety.

According to a Commonwealth Report, traditionally most of the dates consumed in the UK originated from North Africa and most were packed in Marseilles in "glove boxes". Importers are, however, now starting to import directly from other countries, particularly the USA. The reason for this change is due to the fact that the level of infestation and use of agro-chemicals in North Africa is too high.

In 2000, the United Kingdom imported about 10,400 tonnes of dates, valued at US$16,6 million. The following retail prices were noted in London:

Figure 20. World date production in metric tons

Figure 21. Area distribution for date palm

Figure 22. World date exports for the period 1970 to 2000

Figure 23. Export market share (volume) of the major producing countries

Figure 24. Export market share by region

Figure 25. Import market share for selected countries (1998 - 2000) in terms of quantity

Figure 26. Import market share for selected countries (1998 - 2000) in terms of value

Figure 27. Date imports (metric tons) of SADC countries for the period 1970 to 2000

Figure 28. World export unit value. (Source: FAO Agrostat Database)