Mar 3, 2011
11:26 AMOut of the Orchard
Approximately 6 million people live in Jordan, with Amman representing over 2 million. The currency is the Jordanian Dinar at JD$0.7 to US$1. The United States has a Free Trade Agreement (FTA) with Jordan that allows for duty-free access to the country for Washington/USA apples. There is a 4 percent sales tax that all consumers pay, and a 2 percent income tax for businesses. The per capita income was stated several times with several different answers. The FAS FSN (foreign service national) stated US$1,200, our guide thought between US$1-3,000 and the official U.S. Government numbers are US$5,300.00. Regardless, Amman is a country with few natural resources that depend upon other countries' assistance and ex-patriot payments back to Jordan to family members. With this in mind, it is quite amazing just how many containers of Washington apples have been imported.
As you can imagine, there is a thriving trade between Dubai and Jordan, via a 6-day truck journey across three countries. This is a complicated journey due to three border crossings, multiple examinations and often reloading of trucks. Several importers we met with load trucks with Jordanian fruits and vegetables destined to Dubai and return with imported products. All nondirect imported goods pay a 30 percent duty. This Dubai/Jordan trade often includes apples and is not reflected in the most recent import numbers. I would estimate another 20 percent of apple imports move through this channel unaccounted for in the Jordanian Washington apple import statistics.
Apples from the European Union have an 8 percent duty, while Chile has a 38 percent duty. There is also a duty starting June 1st and running through October 31st that adds approximately RD$250 per ton to the cost of non-FTA covered items. This equates to approximately US$6,500 per container. Washington/USA apples are not subject to this duty since we are covered under the FTA.
There are essentially 6 retailers in Jordan; Miles Supermarket (2), C-Town (5 in Amman), Safeway owned by The Sultan Group from Kuwait (5 in Amman), Carrefour (5) and Plaza (1). Although vague and dependent upon whom you talk with, somewhere between 30-35 percent of consumers shop at modern retail. There are many centrally located fruit and vegetable shops that capture a good percentage of the business, but these neighborhood shops are not priced as low as retail, however the quality is often better due to improved care and handling. The drive seems to be towards modern retail through competitive pricing.
Central Wholesale Market Visit: A very Middle East traditional wholesale market with a large quantity of local fruit and vegetables available for sale.
1. Several of these companies work directly with Washington exporters, and several don’t. Those that don’t work directly have contacted Washington industry without response.
2. The high price of Washington in comparison to ‘local’ producing countries was a major topic. Whether the apples were from Turkey, France, Italy, Syria or local – Washington apples were higher priced. With that said, all wholesale market visits had some Washington apples on display and all were complimentary of our quality and storability.
3. The two factors that can or will contribute to increased competition for Washington are; the adequate quality and quantity of the EU and Turkey with superior transit times (one week), and much better payment terms offered by these producers. Several importers visited felt these two factors would ‘cut into’ the Washington share of the Jordanian apple sales volumes in the future.
4. Red Delicious remains the priority representing approximately 70 percent of the total volume imported. Twenty percent Gala and the remaining 10 percent is split relatively evenly between Granny Smith and Golden.
5. The sizing is primarily 100-tray packs moving to 113.
6. I did see several half carton d’Anjous on the market – most US#1 55/60.
7. The Washington POS materials were distributed at retail and fruit and vegetable stalls.
• We visited three neighborhood fruit and vegetable businesses, typically small retailer of better quality fruits and vegetables with Washington pos in place. Prices ranged between JD$1.59 to $2.25 per kg. • Safeway • Miles Supermarket • C-Town