EC Communication on CAP Reform Could Potentially Have Some Lessons for ACP Countries

Summary
There are two areas of the EC communication on CAP reform which could have a bearing on ACP-EU agro-food sector relations: those aspects dealing with the external trade dimensions of the CAP (given the EU is the single largest farm exporter in the world) and those aspects dealing with internal EU policies on managing price volatility and market crisis situations. The EC continues to pay no attention to the impact implementation of EU agricultural policy measures have on ACP markets on which ACP agricultural producers and agro-processors depend.  The EC focuses on how EU trade policies will open up further opportunities for EU agro-food exporters, ignoring African aspirations for the structural development of their own agro-food sectors. The EC could usefully extend it current regulatory initiatives to combat unfair trading practices (UTPs) along agro-food supply chains to of ACP-EU agro-food product supply chains. It could also usefully extend some of its innovative models of loan financing for on-farm investment to ACP producers. Read more “EC Communication on CAP Reform Could Potentially Have Some Lessons for ACP Countries”

Exports of pineapples from Benin to EU to resume, but functioning of supply chain also needs strengthening

 

Summary
Improvements in the food safety control system in Benin are reopening the EU market to pineapple exporters.  This is seen as having the potential to boost both employment and farm incomes. However Ghanaian exporters have identified UTPs along the pineapple supply chains which undermine the commercial viability of pineapple production for export.  Against this background there would appear to be little point in investing in stronger food safety and SPS control systems if the issue of UTPs in Africa-EU agro-food sector supply chains are not addressed, since these can undermine the commercial viability of investments made in both expanding production for export and ensuring effective national food safety and SPS control systems. Read more “Exports of pineapples from Benin to EU to resume, but functioning of supply chain also needs strengthening”

Fears over impact EU SMP stocks on global dairy prices being realized

Summary

There is growing international concern over the impact of accumulated EU skimmed milk powder (SMP) intervention stocks on global milk powder prices. Fears over future EU stock disposal plans, are weighing down global SMP prices. Given the extent to which SMP import prices act as a benchmark for local fresh milk prices, this is an issue of particular concern in ACP countries seeking to develop local milk-to-dairy supply chains. To avert the disruption of efforts in ACP countries to develop local milk-to-dairy supply chains the EU needs to tolerate the continued use of controls on all forms of milk powder imports in those countries where local milk supply development programmes are underway. Read more “Fears over impact EU SMP stocks on global dairy prices being realized”

Global Market Context Far From Favourable in the Context of the End of EU Sugar Production Quotas

Summary

Projected global sugar price trends are unlikely to support EU sugar prices in the post quota abolition period. Caribbean and pacific ACP sugar exporters will be potentially the most vulnerable to EU price declines over the 2017/18 season. This situation could then be compounded by the sugar market effects of the UK’s withdrawal from the EU, currently scheduled for 30th March 2019.  These effects however may be deferred following Prime Minister May’s acceptance that during the implementation period (transitional period) UK/EU27 trade would need to take place within ‘the existing structure of EU rules and regulations’.

Nevertheless there remain profound policy uncertainties around UK sugar market developments which make any projections of likely developments hazardous. Against this background over the coming years ACP sugar exporters will need to closely monitor developments in the Brexit negotiations and the evolution of UK’s autonomous trade policies as they impact on the sugar sector, in order to identify and exploit any market opportunities which might emerge. Read more “Global Market Context Far From Favourable in the Context of the End of EU Sugar Production Quotas”

Tereos Expanding its Presence the East African Sugar Sector

Summary

The planned growth in beet production by Tereos growers in France and the expansion of sugar production in the Czech Republic, alongside concerns over a possible Brexit related disruption of exports to the UK is seeing a major international export drive being launched. While South Asia the main target market, a sales office has also been opened in Nairobi. Tereos also has an expanding sugar cane production presence in East Africa. These developments could greatly increase competition for less competitive African sugar producers.

Expanded EU sugar exports could also contribute to stalling ant recovery in global sugar prices, which would be bad news for all African sugar exporters, given EU price developments will increasingly shadow world market price trends post sugar production quota abolition. Read more “Tereos Expanding its Presence the East African Sugar Sector”

Proposed EC Regulatory Initiative on UTPs Needs to be Extended to ACP-EU Supply Chains

Summary

The EC is currently undertaking consultations on new proposals to reduce unfair trading practices (UTPs), to which farmers are seen as being particularly vulnerable. UTPs are seen as stifling innovation and undermining on-farm investment through reducing the commercial viability of farming activities. The envisaged regulations aim to ensure a fairer distribution of value along agricultural supply chains, and increase both farm incomes and on-farm investment.

There is an urgent need to extend EU regulations on UTPs to ACP-EU supply chains since in some major sectors abuses of the weak market position of smallholder producers are endemic. Investments in poverty focused export orientated smallholder production will be undermined unless issues of UTPs along ACP-EU supply chains are addressed. Read more “Proposed EC Regulatory Initiative on UTPs Needs to be Extended to ACP-EU Supply Chains”

EU plans to invest in agriculture in Africa to curb migration pressured need to address UTPs in Africa-EU agro-food sector supply chains

Summary

EU Agricultural Commissioner Hogan has called for investment to be mobilised in sustainable agro-food sector development in Africa to combat migration pressures. While an EU action plan is under development in this area, calls have been made for the EU to extend its planned regulatory initiative on Unfair Trading Practices (UTPs) to Africa-EU supply chains. Current widespread abusive practices by EU importers fall particularly heavily on smallholder farmers. Given its economic significance, this is an issue which the ACP Group could usefully take up in its post-Cotonou negotiations with the EU as part of the wider dialogue with the EU on migration issues. Read more “EU plans to invest in agriculture in Africa to curb migration pressured need to address UTPs in Africa-EU agro-food sector supply chains”

CBS controls remain threat to South Africa citrus exports to EU despite recent expansion

Summary
Contrary to EU delegation claims, South African citrus exports to the EU have not tripled since 2007.  Export volumes since 2012 have in fact been 6.2% below the recent peak level attained in 2008. This is in part attributable to stricter EU CBS controls which have fallen particularly heavily on emergent and previously disadvantaged farmers, who find themselves commercially excluded from EU market supply chains. On-going campaigning by Spanish citrus growers for stricter CBS controls remains a threat to South African citrus exports, particularly given the burden the existing control measures place on government plant disease control capacities.

The issue of the differential impact which EU SPS controls have on small emergent commercial farmers and large commercial farmers raises the need to improve the design and application of EU SPS controls so as to support smallholder participation in high value export supply chains whilst still ensuring underlying EU SPS controls objectives are attained. Read more “CBS controls remain threat to South Africa citrus exports to EU despite recent expansion”

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”

French producers lead way in expanding EU sugar beet production despite low global sugar prices

Summary

Both Tereos and Cristal Union have announced plans to expand sugar beet plantings by 25% in the 2017/18 season, as EU sugar companies’ battle for market position in a post-production quota EU market. The corresponding contraction of sugar production in areas less favoured for sugar production is however undermined by continued deployment of coupled sugar specific sugar to producers in 10 EU member states accounting for 35% of the total area under sugar beet in the EU in 2016/17. These payments range from €67 to €518 per ha. The trade effects of these policy driven distortions will be most severely felt by traditionally preferred ACP sugar exporters, as EU sugar imports contract and exports expand. ACP sugar exporters will need to radically rethink their market positioning strategies if they are to profitably export to the EU. Read more “French producers lead way in expanding EU sugar beet production despite low global sugar prices”