Summary
New scheduled airline services between Accra and Paris could open up new opportunities for high value horticultural exports from Ghana to France. However sustainable development of such opportunities will be critically influenced by the competitiveness of freight rates offered. Given the history of price collusion among scheduled airline on European freight service routes, this is an area where the European Commission will need to maintain close scrutiny.
Starting on the 28 February 2017, Air France initiated three weekly flights from Paris Charles de Gaulle to Accra in Ghana. (1) This saw the announcement at the beginning March 2017, of a commitment from Air France to facilitating the export of fresh agricultural products from Ghana to Europe.
According to the CEO of Air France ‘cargo will be a key success factor for the economics and the development of the route’. Exports of pineapples from Ghana to France have already been initiated, with a cargo capacity of 10 to 16 tonnes per flight, depending on the aircraft used. This adds an additional 2,500 tonnes of export capacity for the Ghanaian fresh fruit sector.
To put this in context, in 2015 France was the leading destination for Ghanaian pineapple exports to the EU, taking 36.6% of total EU pineapple imports from Ghana, amounting to some 7,314 tonnes. The expansion of cargo capacity introduced by Air France since the end of February 2017 is thus equivalent to over 1/3 of the tonnage of pineapples imported into France in 2015.
Exports of Ghanaian Pineapples (080430) by EU market by Volume (Tonnes) and Value
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |
| EU Tonnes | 28,741 | 34,530 | 41,016 | 35,416 | 31,275 | 24,409 | 19,953 |
| -France | 6,016 | 9,992 | 13,070 | 10,020 | 10,657 | 9,519 | 7,314 |
| Belgium | 13,285 | 11,439 | 15,607 | 13,647 | 10,224 | 8,303 | 7,146 |
| UK | 4,113 | 4,124 | 5,380 | 5,141 | 4,814 | 3,305 | 2,900 |
| EU Value (€) | 25,790,850 | 31,061,118 | 36,457,868 | 33,813,538 | 30,263,376 | 22,684,224 | 24,241,905 |
| France | 3,385,639 | 6,730,268 | 7,833,366 | 5,836,666 | 6,835,732 | 6,412,787 | 7,120,809 |
| Belgium | 7,829,271 | 7,574,555 | 9,780,110 | 8,091,736 | 6,697,205 | 6,158,956 | 6,195,008 |
| UK | 9,702,232 | 9,856,423 | 13,227,326 | 15,108,433 | 11,617,371 | 6,312,442 | 6,988,599 |
Source: EC Market Access Data Base
It is however equivalent to almost the total volume of the much higher value guava and mango imports from Ghana in 2015 (2,655 tonnes) and is over 14 times higher than the volume of mangoes and guavas imported into France from Ghana in 2015.
Exports of Ghanaian Guavas and mangoes etc. (080450) by EU market (Tonnes)
| 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | |
| EU Tonnes | 883 | 428 | 226 | 840 | 1,621 | 2,384 | 2,655 |
| UK | 170 | 106 | 101 | 100 | 697 | 1,765 | 1,890 |
| Italy | 4 | 16 | 31 | 51 | 133 | 180 | 173 |
| France | 20 | 6 | 3 | 59 | 52 | – | 176 |
| Germany | 44 | 28 | 53 | 37 | 76 | 156 | 155 |
| Holland | 439 | 248 | – | 437 | 431 | 224 | 144 |
| Belgium | 161 | 7 | 13 | 107 | 232 | 55 | 115 |
| EU Value (€) | 2,346,184 | 2,265,868 | 900,104 | 3,057,830 | 8,882,893 | 15,480,766 | 18,844,402 |
| UK | 233,608 | 169,073 | 234,927 | 346,116 | 3,724,689 | 11,184,333 | 14,476,361 |
| Italy | 5,437 | 109,746 | 226,930 | 381,677 | 1,010,907 | 1,385,635 | 1,336,398 |
| France | 23,607 | 7,602 | 4,856 | 53,487 | 114,418 | – | 1,290,262 |
| Germany | 126,673 | 156,473 | 313,801 | 289,502 | 559,958 | 1,201,089 | 1,215,973 |
| Holland | 1,784,550 | 1,775,907 | – | 1,795,589 | 2,889,952 | 1,578,128 | 193,428 |
| Belgium | 101,388 | 24,584
|
64,309 | 143,289 | 574,508 | 111,964 | 330,095 |
Source: EC Market Access Data Base
The opening of direct Air France flights complements the daily flights which its sister company KLM operates from Amsterdam to Accra.
March 2017 also saw the European Commission re-adopt its cartel ruling against leading air cargo companies for price fixing on freight charges on intra-European Economic Area routes. This re-imposed fines totaling €776.47 million on the companies concerned. The initial ruling, first adopted in 2010, was overturned on a technicality in 2015. The EC decision corrected the technical issues addressed in the 2015 court decision, leading to a re-imposition of slightly reduced levels of fines.
The fine relates to the pricing practices over the period from December 1999 to February 2006 of Air France, KLM, Martinair, Air Canada British Airways, Cargolux, Cathay Pacific Airways, Japan Airlines, LAN Chile (now LATAM), SAS, Singapore Airlines, Lufthansa, Swiss International Air Lines and Qantas.
EC representatives pointed out that air cargo services ‘carry more than 20% of all EU imports and nearly 30% of EU exports’ and that ‘working together in a cartel rather than competing to offer better services to customers does not fly with the Commission’, hence the financial penalties re-imposed on offending airlines.
Source:
(1) Air France, ‘Accra, new Air France destination in Ghana’, 8 August 2016
http://www.airfranceklm.com/en/accra-new-air-france-destination-ghana
(2) Freshplaza.com, ‘Air France launches Accra-Paris route to increase fresh produce exports’, 2 March 2017
http://www.freshplaza.com/article/171723/AirFrance-launches-Accra-Paris-route-to-increase-fresh-produce-exports
(3) freshfruitportal.com, ‘European Commission fines leading aid cargo carriers €775M for price fixing’, 20 March 2017
http://www.freshfruitportal.com/news/2017/03/20/european-commission-fines-leading-air-cargo-carriers-e776m-price-fixing/
(4) Caribbean Journal, ‘New International Airport in St. Vincent and the Grenadines’, 12 February 2017
A New International Airport in St. Vincent and the Grenadines
| Comment and Analysis Deregulation and the introduction of competitive pricing for cargo carried on scheduled airlines revolutionized the ACP-EU trade in fisheries products. The opening up of new routes and competition in cargo freight rates can create major new export opportunities for high value horticultural exports. In this context it is to be hoped the EC will maintain as much scrutiny on freight rates charged on ACP-EU routes as it has on intra-European-Economic Area routes. This would appear to be particularly important given the corporate links between Air France and KLM.The opening up of direct flights between Accra and Paris could prove particularly important in the Ghanaian mango trade, which is currently heavily dependent on the UK market in its trade with the EU. There remains the danger that unless appropriate unilateral UK trade regulations are put in place to extend current conditions of access to the UK market from day 1 of the UK’s formal departure from the EU (now scheduled for 30 March 2017), the Ghanaian trade in mangoes into the UK could face the standard 10% MFN duty.While this would reduce the profitability of Ghanaian mango exports to the UK, the trade into the UK currently earns substantially more per kg than the trade into EU27 markets (€7.66/tonne compared to €5.71/kg). This makes it unclear what the commercial impact of a 10% MFN duty which may be imposed, could be on current trade flows. Nevertheless the commencement of direct Air France flights to Paris, will now give Ghanaian mango exporters more options.The opportunities opened up by new airline services for ACP horticultural exporters are not restricted to Africa. The opening of a new international airport in St Vincent could open up new opportunities for horticultural exports from this small island economy, once scheduled services commence. However the competitiveness of freight rates charged will be critical to the sustainable development of such new export opportunities. |
| Key words: Horticulture, Mangoes, Guavas, Ghana, Air France, KLM, BREXIT, St Vincent Area for Posting: Horticulture, West African EPA, Corporate, BREXIT, Caribbean EPA |