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


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.

In August 2017 the establishment of a food safety surveillance system in Benin was announced, which will allow the lifting of the 2016 voluntary ban on pineapple exports from Benin to the EU (1). The ban was introduced in the absence of a system for monitoring the residues of the chemical Ethephon which is used in the ripening process and for which the EU has a maximum permitted residue level (1).

The establishment of the food safety surveillance system under the auspices of the government of Benin’s Central Laboratory of Food Safety Control (LCSSA) was supported by the FAO and the IAEA. The capacity development programme involved ‘putting in place the analytical techniques and the surveillance system required to monitor residues in pineapples and certify that they meet the European Union’s requirement on ethephon’. The system of testing used is ‘easy-to-perform and accurate’ on a range of antibiotics, mycotoxins and pesticides.  By combining the use of two tools it provides ‘a more precise measurement than each one would do individually’ (1).

Beyond developing analytical techniques the programme also involved staff training, and the supply of both equipment and reagents.  The programme has reportedly created the foundations for LCSSA to ‘become a leading institution in West Africa in food safety testing’. The CLSSA was certified in May, 2017 clearing the way for the lifting of the voluntary export ban (1).

In terms of trade with the EU between 2008 and 2014 Benin’s recorded exports of pineapples almost doubled, before stagnating in 2015 and declining in 2016 in the face of the voluntary export ban (2).

The introduction of the voluntary export ban led to a loss or income and reduction in farm employment. While Benin reportedly produces between 400,000 and 450,000 tonnes of pineapples per annum, exports to overseas markets prior to the ban accounted for only 2% of production.  Despite the low share of exports in total production, these exports ‘accounted for half of the sector’s profits’. It is against this background that the sector is now looking to expand exports, with potentially significant income and employment gains (1).

Evolution of Benin’s Pineapple (080430) Exports to the EU 2008-2016

080430 2008 2009 2010 2011 2012 2013 2014 2015 2016
Tonnes 1,853 2,130 2,095 2,350 2,417 3,053 3,676 3,647 2,948
Euro 1,388,393 1,425,241 1,490,998 1,628,938 1,581,743 2,067,085 2,910,404 3,846,578 2,823,269

Source: EC, Market Access Data Base http://madb.europa.eu/madb/statistical_form.htm

However in the pineapple sector this Beninese export drive could face strong headwinds In November 2017 pineapple exporters in Ghana complained about the abusive practices along the supply chain, which were resulting in African producers exclusively carrying the burden of difficult market conditions.

Exporters in Ghana asserted that unlike elsewhere where a price quotation is offered ‘before the fruits leave the country of origin’, in Ghana and elsewhere in Africa the price paid pineapple exporters is based on the prevailing wholesale market price at the time of sale, minus the importers profit margins. The importers margin is determined exclusively by the importer, with the residual revenues being used to pay African exporters.

There are concerns over the lack of transparency in this arrangement and the absence of any mechanism through which African exporters can appeal over the final price they are paid by the European importers.  In this context the burden of any pineapple market price declines is borne exclusively by African producers. In November 2017 Ghanaian pineapple producers faced packaging and transportation costs of €1.70 per box on exports to the EU, while receiving a price of only €3 to €4 for a box of pineapples (3).

According to freshplaza.com the poor market conditions are unlikely to improve in the near future. It was noted the ‘heady prices of the last two years are a thing of the past… due to a big supply’.  Dutch importers warned that ‘prices have stayed well below cost price in the last few months, and will remain so for the rest of the year’. This is attributed to the emergence of new supplying countries with more and more pineapples being offered for international trade, with rising Chinese import demand only partially off-setting this increase in supply (4).

Comment and Analysis

The current poor situation on the pineapple market in the EU does not bode well for aspirations of the Benin pineapple sector to expand exports, thereby boosting employment and farm incomes.

While Dutch importers have attributed the poor prices currently being offered to increased supplies, this does not appear to be the case for the EU as a whole. In 2015 pineapple import volumes were the lowest in 9 years and the second lowest in 2016. This being noted the situation is slightly different on the Dutch market, where import volumes recovered strongly in 2016.

EU Pineapple imports all sources – tonnes (2008-2016) – all extra-EU sources

2008 2009 2010 2011 2012 2013 2014 2015 2016
EU 932,333 883,434, 903,683 921,351 866,474 853,264 937,867 837,308 845,408
Holland 204,616 173,106 188,431 211,005 259,003 277,808 321,092 250,598 265,703

EC, Market Access Data Base

The reality is the pineapple market in the EU is quite volatile, in a context where the delay in the delivery of a single consignment can strongly boost prices (4). The impact of this price volatility on African pineapple producers depends strongly on the commercial basis on which exports take place.In West Africa some exports of pineapples take place on the basis of agreements made before planting time; in other cases exports tale place on the basis of agreements made between planting and before harvest; while in still other instances no agreements are in place prior to harvest (6). Often it is small unorganised growers who export without any agreements in place, leaving them highly vulnerable to unfair trading practices.

It is against this background that EU market price volatility and the complaints from Ghanaian exporters over UTPs need to be seen. The experience of Ghanaian pineapples exporters of UTPs is replicated across a variety of products across Africa.  This serves to highlight the need to extend the EC’s planned regulatory initiative to strengthen the functioning of the agricultural supply chains and curb unfair trading practices to ACP-EU supply chains.  This would be entirely consistent with EU commitments to promoting ‘policy coherence for development’.

Speaking in Dublin on the 6th October 2017 the EC Agricultural Commissioner Phil Hogan, expressed concerns about unfair trading practices (UTPs) within internal EU agricultural supply chains, referring in particular to the ‘stark’ ‘imbalance of bargaining power between price setters and price takers’ (5).

While Commissioner Hogan’s comments on the stark imbalance in bargaining power were aimed at addressing concerns of Irish livestock producers, the basic point would appear to be equally relevant to African pineapple producers. While Commissioner Hogan was critical of the existing EU supply chain initiative, he did not come out in favour of any specific proposals for reform (5).

Previous proposals advanced by the EC’s Agricultural Markets Task Force for tackling unfair trading practices included: the establishment of an adjudicator; and the introduction of mandatory written contracts (5).  Both of these proposals would appear highly relevant in the context of the functioning of Africa-EU pineapple supply chains.

Unfortunately to date there are no indications the European Commission is planning to propose extending regulatory initiatives aimed at eliminating unfair trading practices to the functioning of ACP-EU supply chains.

In this context there would appear to be a case for concerted, intensified, NGO consumer based campaigning aimed at pressuring supermarkets to ensure importer/suppliers respect certain minimum standards of fair commercial practices in their transactions with African producers and for supermarkets to support the establishment of an adjudication process for where UTPs are identified in Africa-EU supply chains.

In this context it should be noted that following NGO pressure, the Danish multinational dairy company Arla, has recognized it has obligations under the UN Guiding Principles for Business and Human Rights to ensure that it’s trading and investment practices do not have any adverse human rights effects in terms of the right to a sustainable livelihood.

As part of current initiatives to improve the functioning of supply chains and remove unfair trading practices from the agro-food sector, supermarkets should be encouraged to pay far closer attention to the commercial practices of their importer/suppliers in dealing with African suppliers.

(1) International Atomic Energy Authority, ‘Benin Resumes Pineapple Exports — With the Help of Nuclear Techniques’, 11 August 2017
(2) EC, Market Access Data Base
(3) Freshplaza.com, ‘Minimum pineapple price on markets is quite bad’, 17 November 2017
(4) Freshplaza.com, ‘Overview global pineapple market’, 17 November 2017
(5) Globalmeatnews.com, ‘EU plans to regulate trade won’t improve producers incomes, meat retailers claim’, 23 October 2017
(6) International Food and Agribusiness Management Review , ‘Bottlenecks and Opportunities for Quality Improvement in Fresh Pineapple Supply Chains in Benin’, Volume 17 Issue 3, 2014

Key words:           Pesticides, Horticulture, Benin, Ghana, pineapples, FAO
Area for Posting:  SPS, Horticulture, CAP, PCD, West Africa EPA