EU Milk Production Responding Once More to Price Recovery, with Buoyant Exports

Summary

Efforts to curb EU milk production expansion through financial incentives for voluntary production reduction are held to have met with some success in promoting improvements in farm gate milk prices. However rising farm gate prices is now stimulating a renewed expansion of milk production. This is despite prices still being below farm production costs. The EMB continues to call for a comprehensive Market Responsibility Programme which includes mandatory production restraint.

EU exports of SMP and fat filled milk powders to ACP markets continue to grow, with WMP exports being sustained. Certain ACP markets are also being targeted for increased cheese and butter sales.

While ACP markets remain of marginal significance to overall EU dairy exports, for certain products and for countries these markets collectively are of growing significance. In addition it should be borne in mind it only requires a small volume of EU exports to have a disproportionate effect on individual African dairy markets.

ACP governments seeking to grow their own milk production, as part of integrated dairy sector development strategies, will need to closely monitor current EU export trends, including in fat filled milk powders. ACP governments may need to look at what trade measures can be set in place to sustain local dairy sector development efforts. Extending the product coverage of EU MMO analysis of trade flows to include fat filled milk powders could assist in this regard. Read more “EU Milk Production Responding Once More to Price Recovery, with Buoyant Exports”

EU poultry meat production rising despite avian flu outbreaks

Summary

Avian flu outbreaks have left overall EU poultry meat production largely unaffected. Although AI related restrictions reduced EU poultry meat export volumes in the first half of 2017, particularly to South Africa the largest single export destination (-63%). Export growth to Gabon, DRC and Ghana while extremely high (+120%;96% and 69% respectively) could not outweigh declines in EU exports to South Africa and Benin. Beyond the current AI crisis in the EU, expanding imports of whole birds from Ukraine, the impact of lower feed costs on EU production and possible Brexit related disruptions of the EU27-UK poultry trade, could all fuel a further expansion of EU exports to Africa. This could continue to inhibit efforts to promote local poultry sector development across Africa. Patterns of Belgium poultry meat exports suggest African governments need to pay closer attention to the origin of poultry meat imports nominally originating in particular EU member states. Read more “EU poultry meat production rising despite avian flu outbreaks”

EU Farmers Continue Campaign for Stricter EU Citrus Black Spot Controls

Summary

EU farmers organizations continue to push for stricter SPS controls on citrus imports including the mandatory use of cold treatment. The South African citrus industry believes such a requirement would be an economic disaster for the industry. In the context of the Spanish citrus industry’s pressure for stricter EU SPS controls, the UK’s departure from the EU could offer a life line for the South African citrus industry. If SPS controls not relevant to UK agricultural production were lifted and duty free-quota free access to the UK market could be secured in line with the South African government’s current aspirations for post-Brexit trade relations with the UK, then less restrictive market access requirements would apply potentially opening up additional export opportunities to the UK market. Read more “EU Farmers Continue Campaign for Stricter EU Citrus Black Spot Controls”

Implications of UK proposals for future customs arrangements in trade with the EU27 for ACP countries

Summary

UK proposals for future customs arrangements with the EU seek to subvert the sequencing of negotiations laid in the EU Council instructions to the European Commission for the conduct of the Brexit negotiations. The UK proposals have been criticized as ‘a fantasy’ in some political quarters of the EU. The proposals nevertheless include elements which could be built on in protecting ACP interests within the Brexit process. The UK’s reiteration of assurances of continuity in access to the UK market for ACP exporters leaves unaddressed how this is to be achieved. The UK’s ambitious aspirations for trade agreements with non-EU countries encompassing services, digital trade and trade in goods, suggest concluding such agreements could be a lengthy process. This highlights the need for transitional arrangements to ensure continuity of ACP access to the UK market under current terms and conditions from day 1 of the UK’s formal departure from the EU. Read more “Implications of UK proposals for future customs arrangements in trade with the EU27 for ACP countries”

Hard Brexit Could Severely Disrupt EU27-UK Agro-Food Sector Trade

Summary

While the EU has been urged to ‘take a more active role in trying to shape a Brexit outcome that is least damaging to its interests’, the ACP Group needs to ensure this approach is extended to the EU’s traditional developing country partners such as the ACP Group.  It is becoming increasingly apparent that for major ACP agro-food export product groups, Brexit could have a major impact on the functioning of existing ACP supply chains currently serving the EU28 market.  This needs to be fully assessed so that as the Brexit negotiations develop the key priorities for administrative and regulatory initiatives and marketing adjustment support are identified.    Read more “Hard Brexit Could Severely Disrupt EU27-UK Agro-Food Sector Trade”

Agro-Food Sector Effects of the Application of MFN Duties on EU27-UK Trade: An Area of Potential ACP Concern and Opportunity

 

Summary

If MFN duties are introduced on EU27-UK trade as a result of a failure to reach a new trade agreement this could disrupt existing ACP supply chains. However such a development could also present opportunities for ACP countries to expand their direct exports of value added products to the UK in sectors such as the cocoa sector.  Marketing adjustment and investment support however could be needed to enable ACP exporters to respond positively to the challenges which lie ahead. Read more “Agro-Food Sector Effects of the Application of MFN Duties on EU27-UK Trade: An Area of Potential ACP Concern and Opportunity”

UK Area Under Sugar Beet Set to Surge

 

Summary

A major expansion of the area under sugar beet in the UK (+ 1/3) is planned in 2017/18, with potentially a further major expansion by 2020 if current investment plans of Al Khaleej International to re-establish sugar beet processing in Yorkshire are approved. While a failure to conclude a UK-EU27 trade agreement could open up new export opportunities for ACP sugar suppliers to the UK, this would be strongly influenced by future UK sugar sector tariff policy. If tariffs remain unchanged the source of ACP sugar imported into the UK could shift from the Caribbean and Pacific suppliers to lower cost Southern African suppliers. UK government policy statements suggest Southern African LDC sugar exporters would enjoy the most secure commitment to continued duty free-quota free access for sugar exports to the UK market post Brexit, providing them with an inside track in pending negotiations over supply agreements for 2019. Read more “UK Area Under Sugar Beet Set to Surge”

UK Food Policy Academics Warn of Serious Brexit Complications for UK Agro-food Sector

Summary

Academic analysis suggests the lack of attention to detail and serious capacity constraints in the UK administration could undermine the functioning of UK food safety and SPS control systems with this serving to disrupt the smooth functioning of import supply chains.  It also argues policy uncertainties around Brexit could well enhance the influence of large agro-food sector players to the detriment of the smooth functioning of agro-food sector supply chains.  This suggests a need for more proactive engagement of ACP exporters associations in these Brexit related policy issues. Read more “UK Food Policy Academics Warn of Serious Brexit Complications for UK Agro-food Sector”

Post Brexit port chaos could disrupt ACP Supply Chains to the UK via the Netherlands and Belgium

Summary

A consultancy report suggests significant additional logistical costs could arise on EU27-UK agro-food trade regardless of the final UK-EU27 tariff dispensation, as a result of the introduction of new customs controls. Depending on post-Brexit arrangements the cost effects range from additional transportation costs to a need to fundamentally rethink the import-export trade for perishable products. Given major ACP supply chain serve the UK market via other EU member states, this could profoundly disrupt the functioning of these supply chains, with fresh fruit, horticulture and floriculture exports via the Netherlands being most severely affected.  This requires a study to scope the scale of the problem and identify possible remedial measures and the creation of market repositioning support initiatives by both the EU28 and UK authorities. Read more “Post Brexit port chaos could disrupt ACP Supply Chains to the UK via the Netherlands and Belgium”

DIT SACU Discussions to Extend Current Access to the UK Market More than a Technical Exercise

Summary
During the July 2017 visit of UK Secretary of State Lord Price to Southern Africa a commitment was made to replicating current market access arrangements post-Brexit. However it remains unclear how this to be achieved. The transitional extension of existing reciprocal preferences could not only face serious opposition from WTO members but would be far from a simple ‘technical exercise’. New rules of origin which took account of the UK’s departure from the EU agreement would be essential, in order to establish which products qualified for ‘originating status as UK products. The alternative would amount to an absence of rules or origin. Either would be a substantive modification of the existing terms of the UK’s export trade. The future of Tariff rate Quota (TRQ) arrangements under the EU agreement would also need to be resolved in the immediate post Brexit period. Looking to the longer term, there are a multiplicity of non-tariff issues related to post-Brexit UK trade and agricultural policies which give rise to profound uncertainties over the future value of any post Brexit preferential trade arrangement with the UK for certain SACU members. Many of these uncertainties will need to be addressed before the future value of a bilateral trade deal with the UK can be fully assessed. Read more “DIT SACU Discussions to Extend Current Access to the UK Market More than a Technical Exercise”