Dutch onion exports hit further record highs with West African markets playing a  critical role


Dutch onion exports continue to grow with ACP markets, particularly in West Africa being major destination markets. Since 2010 the importance of ACP markets to extra-EU Dutch onion exports has increased from 57.6% to 62.5%, with ACP market increasing in importance whenever difficulties are faced on other third country markets. This suggest any disruption of Dutch-UK onion exports arising from a hard-Brexit could rebound in terms of increased Dutch onion exports to ACP markets.  This in turn could adversely impact on local efforts across the ACP to expand local production of onions for national and regional markets Read more “Dutch onion exports hit further record highs with West African markets playing a  critical role”

Concerns over Division of EU28 WTO TRQ Commitments Emerge


Dividing up existing EU WTO TRQ market access commitments a between the EU27 and UK, could prove controversial as third country exporters seek to retain their access to the EU market, while seeking increased access to the UK market. Failure to reach agreement on the divisions of EU WTO TRQs could generate resentment amongst WTO members, with this leading to challenges to any transitional arrangements for ensuring ACP countries retain preferential access to the UK market which are not fully WTO compatible. Read more “Concerns over Division of EU28 WTO TRQ Commitments Emerge”

USDA projects lower EU sugar price post production quota abolition


While USDA maintains EU sugar prices will need to fall if EU projections for growth in sugar exports in the post-quota period are to be met, this neglects the long experience EU sugar companies have of operating within a dual price system. It is possible substantial price premiums could be maintained on the EU sugar market, with this raising the issue of what regulatory initiatives are required to ensure traditional ACP suppliers share in any EU sugar market prices premiums. This would appear to require an extension of the EC’s current regulatory initiative on UTPs to ACP-EU sugar supply chains. This could potentially include regulatory requirements mirroring those which govern relations between domestic EU sugar beet growers and EU sugar beet millers. Read more “USDA projects lower EU sugar price post production quota abolition”

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


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”

Brexit and Trade Displacement: Areas of Concern for ACP Countries


An additional area of impact of Brexit which has to date been neglected when considering the consequences for ACP countries arising from the trade displacement. This would arise from two inter-related development: firstly the possible introduction of MFN tariffs on mutual EU27/UK trade in agro-food products; secondly the impact of new UK trade deals on the market position of EU27 suppliers on the UK market. Both of these developments could see export drives targeting ACP markets in the most seriously affected products, from sugar and dairy products to beef and poultry meat. Read more “Brexit and Trade Displacement: Areas of Concern for ACP Countries”

Report Paints Grim Picture for Prospects for Integrated Dairy Sector Development in Nigeria


The PwC report paints a pessimistic picture of the future prospects for the development of Nigerian milk production, given the serious constraints on the development of commercial milk production. There is a need to recognise that if multinational dairy companies are to effectively expand local milk sourcing this will need to be part of a sector wide approach involving all dairy industry players. If not all players are on board the differential use of milk powders in the production of dairy products will create competitive pressures which individual corporate efforts to expand local milk sourcing. This may well require the targeted use of trade policy tools to ensure discipline in support of any sector wide approach. However this could fall foul of EPA provisions prohibiting the use of such tools, should Nigeria sign on to the west Africa-EU EPA. Read more “Report Paints Grim Picture for Prospects for Integrated Dairy Sector Development in Nigeria”

EC Proposals on Customs Cooperation during the Transition Period Raise Longer Term Concerns

EC proposals for the customs cooperation arrangements in the immediate pre and post-Brexit period for goods in transit or storage, raise fundamental questions amount how the on-ward shipment of third country products between the EU27 and the UK will be handled post Brexit. This potentially raises serious customs administration issues for ACP exports to the UK which currently transit a EU27 member state or which serve EU27 markets through the UK. These issues will need to be addressed sooner rather than later. Read more “EC Proposals on Customs Cooperation during the Transition Period Raise Longer Term Concerns”

Trend Towards Reduced Sugar Content for Processed Food and Drink Products Taking Hold


Campaigns to reduce the sugar content of food and drink products are gaining traction with consumers, while coordinated efforts are underway to promote greater use of alternative sweeteners within the food and drink industry. The success of efforts to reduce ‘hidden sugars’ however will be strongly influenced by the UK’s future sugar sector trade policy. UK sugar tariff reductions post-Brexit could slow down current efforts to reduce sugar usage in food and drink products, undermining public health policy objectives.

The trend towards a reduction in the sugar content of processed food products is gaining ground amongst EU consumers. According to analysis from Mintel ‘consumers in European markets are cutting their consumption of sugar – in Poland and Spain 63% are actively reducing consumption or avoiding the ingredient altogether. Some 60% of Italians are doing the same, as well as 55% of French consumers and 54% of Germans’ (1).

Research commissioned by the labelling organisation Sugarwise found 73% of shoppers said they ‘might or would definitely switch from their usual brand to one carrying the Sugarwise logo’. Sugarwise certifies ‘food with less than 5g of free sugars per 100grams and drinks with less than 2.5g per 100 ml’. Sugarwise is expanding its activities to mainland Europe after initially launching in the UK (1).

The move towards reduced sugar usage in food and drink products will be facilitated by the initiative launched by the UK Food and Drink Federation (FDF) and the British Retail Consortium (BRC) to bring together data and analysis on the range of sugar alternatives and their practical use in different food and drink product manufacturing activities.

Ingredient manufacturers and researchers are being invited to provide details of products which would assist with industry reformulation efforts, aimed at reducing ‘hidden sugars’ in food and drink products without compromising  the quality, taste, safety or shelf life of the product. The initiative is explicitly aimed at taking food and drink industry reformulation efforts to the ‘next level’, in response to Public Health England’s guidelines and the UK government’s Childhood Obesity Plan, which targets a 20% reduction in sugar consumption by 2020 (2).

Meanwhile Sugarwise has called on the UK government post-Brexit to apply differential import tariffs, based on the sugar content of products imported into the UK. It has called for low or no-sugar brands to enter the UK market free of tariffs.  This is seen as necessary to address the current reality that ‘healthier products …tend to be more expensive’ (1).

Comment and Analysis

While the practicality of the proposals advanced by Sugarwise for the application of differential tariffs on food and drink imports based on their sugar content may be questioned, it does raise the broader question of the consistency of any UK government moves to liberalise access to the UK sugar market post-Brexit with government health policies aimed at reducing per capita sugar consumption both by imposing taxes based on the sugar content of products and through voluntary guidelines on sugar reduction in manufactured food products (see companion article ‘Multiple challenges pending for ACP sugar exporters’, 1 May 2017).

This issue of how the UK government plans to reconcile its public health objectives related to reducing ‘hidden sugars’ in food and drink, with pressures to liberalise import tariffs on agricultural products such as sugar, will be critical to the future pace of the erosion of the value of any preferential access which ACP countries may be able to reconsolidate on the UK for their sugar exports in the post-Brexit period.

Currently scheduled EU reforms are projected to reduce sugar prices on the EU market. However within 18 months, if current sugar sector tariffs are retained and the UK’s exit from the EU is mishandled such that MFN tariffs are introduced on UK/EU27 mutual trade, then UK sugar prices could recover strongly. At present EU27 suppliers provide around 20% of UK sugar consumption (mainly from France and Holland). This trade would grind to a halt if MFN duties were imposed on mutual UK/EU27 trade (see companion article ‘Agro-Food Sector Effects of the Application of MFN Duties on EU27-UK Trade:  An Area of Potential ACP Concern and Opportunity’, 18 August 2017).  In this context, with expanded UK beet production likely to meet only 15% of UK consumer demand by 2019, sugar shortages could emerge with disproportionately high increases in UK retail sugar prices occurring.

This could create new opportunities for ACP sugar exporters to the UK, if public health concerns around ‘hidden sugars’ were to outweigh the lobbying efforts of Tate & Lyle Sugar to secure a removal of current import duties on world market priced sugar (see companion article ‘What are the implications for ACP sugar producers of Tate & Lyle Sugars expectations on UK sugar sector policy post-Brexit?’, 10 April 2017) and UK Department of International Trade (DIT) efforts to fast track the conclusion of FTA arrangements with major developing country groupings such as those in the Mercusor Group.

(1) Foodnavigator.com, ‘Healthiest products should be tariff free post-Brexit, says Sugarwise’, 25 August
(2) Foodnavigator.com, ‘FDF-BRC-back-coordinated-approach-to-sugar-reduction’, 21Augusts 2017

Key words:    Sugar, Food and Drink Federation, British Retail Consortium, Sugarwise
Area for Posting: Sugar, Brexit

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


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


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”