Volatile Prices of Fresh Tomatoes Drive Egypt’s Value Added Tomato Sector Expansion

Egypt holds a significant position in the global tomato market, ranking as a top-five producer with over 6.3 billion kg volume in 2023, and a key exporter, especially of processed tomato products. Recent developments highlight both opportunities and challenges within the sector.

Processed Tomato Sector Investments and Outlook

Bulgarian agribusiness company Balkan Agricultural is investing USD 16.7 million in a new processing facility in New October City. Expected to be operational by late 2025, this plant aims to process 350,000 to 400,000 metric tons (mt) of tomatoes annually, yielding approximately 70,000 mt of paste. This investment builds upon Egypt's previous success in the processed tomato trade, reflected in its over USD 91.7 million canned tomato exports in 2023.

Projections indicate that national tomato production will reach 6.1 million metric tons (mmt) by 2026, and domestic consumption will fall to 5.3 mmt. These figures represent a slight long-term decline, with production decreasing 1.2% year-on-year (YoY) from 6.5 mmt in 2021, and consumption dropping 1.5% annually from 5.8 mmt. Despite this, the near-term outlook for the processing segment remains stable. The processing volume forecast for the 2025 season is steady at 780,000 mt, matching 2024 levels. This stability is supported by consistent factory gate prices, currently around USD 130/mt, and no reported water availability issues impacting the winter or upcoming summer crops.

Significant Price Volatility in Fresh Tomato Market

In contrast to the processed sector, the fresh tomato market demonstrates considerable price volatility, primarily influenced by seasonal factors and demand shifts. A notable example occurred in Apr-25, when fresh tomato prices surged by 100% month-on-month (MoM). According to Tridge On-the-Ground Updates, prices reached USD 198.019/mt, a sharp increase from USD 99.009/mt recorded in Feb-25.

This increase in fresh tomato prices was driven by several factors. Heightened domestic consumption during the Eid El-Fitr and Sham El-Nesim festivals significantly boosted demand, precisely as the winter harvest period concluded, tightening available supply. Concurrently, reported weak export demand may have kept more tomatoes within Egypt, but this was insufficient to counteract the strong festive demand and reduced seasonal availability, ultimately pushing prices upward.

Figure 1. The Wholesale Price of Fresh Tomatoes in Egypt

Source: Tridge

Change in Favour of Sun-Dried Tomatoes

To mitigate the risks associated with fresh market price swings and enhance income, Egyptian growers, particularly in southern regions like Luxor, are increasingly focusing on value-added products like sun-dried tomatoes. This strategic shift towards sun-dried tomatoes is underpinned by favorable economics. Dried tomatoes command a significantly higher price, approximately USD 3.33 per kilogram (kg), compared to fresh tomatoes at around USD 0.14/kg. While it takes about 10 kg of fresh produce to yield 1 kg of dried tomatoes, the substantial price premium makes this value-addition process an attractive financial alternative for growers seeking to mitigate fresh market volatility.

This diversification caters to a robust export market, with demand primarily from Europe, East Asia, and the Middle East. Egypt's annual exports of dried tomatoes now exceed USD 100 million, providing vital income diversification and creating employment opportunities in rural areas.

Overall, while Egypt's tomato production may face headwinds, strategic investments in processing and a growing focus on high-value dried tomatoes demonstrate a move towards greater stability and profitability within the sector, countering the inherent volatility of the fresh market.