Summary
In the face of sustained low prices EU sugar production is declining as part of the now post-quota abolition market adjustment, with lower areas under sugar beet being contracted by beet processing companies. There is a growing variation in prices across EU markets with ACP exporters needing to enhance their marketing operations in the EU to maximum total revenues gained on sales to the EU. ACP export volumes to the EU nearly doubled in 2018/19 compared to the depressed levels of 2017/18, while EU export volume fell back dramatically (-53%), but nevertheless remained above pre-quota abolition export levels (+23%). ACP sugar exporters have a disproportionate dependence on the UK market with Belize Guyana and Fiji being particularly exposed. ACP sugar exporters will thus need to keep a close eye on developments around Brexit in the coming year, given the impact a ‘Hard’ Brexit could have on price levels on both the UK and EU27 markets. Read more “EU Sugar Production Adjusting After Quota Abolition and In Face of Low Prices, with Renewed Growth in Imports and Reduced Exports”
Category: Caribbean
Evidence Suggests Extending Sugar Content Tax to Snacks Would be More Effective in Combatting Obesity
Summary
Public health concerns are leading to a gradual but sustained reduction in EU sugar sector consumption. With the EU sugar sector finding a new post-quota equilibrium this is likely to reduce market opportunities in the EU for ACP sugar exporters. This will require improved marketing of sugar in the EU and the identification and exploitation of markets beyond the EU. This will also need to include at the national level in ACP sugar exporting countries structured dialogues with the international sugar companies involved in local sugar production on a common strategy for market and revenue diversification which protects and promotes the economic well-being of local sugar farmers and sugar sector workers. Read more “Evidence Suggests Extending Sugar Content Tax to Snacks Would be More Effective in Combatting Obesity”
Tremendous Short Term Scope for African Avocado Exports Identified Although Long Term Market Saturation in the EU Likely
Summary
While ACP exporters have seen considerable growth in avocado exports to the EU since 2008, their market share has been undermined since the entry into force of the EU-Andean Pact Trade Agreement in 2013, with this being particularly acute on the UK market. In addition while consumer demand for avocadoes continues to grow in the EU, the rate of growth is slowing down. Nevertheless African ACP countries have considerable unexploited production and export potential, with a considerable growth in the area under avocadoes being underway. The UK governments’ decision to remove MFN tariffs and import levies on avocadoes post Brexit, will further undermine the position of all but the most competitive ACP avocado exporters on the UK market. This is likely to be compounded by the potential of Brexit to disrupt the functioning of triangular supply chains for the export of avocadoes to the UK market via EU27 member states. Policy dialogues between the governments of ACP avocado exporting countries and the EU27 and UK authorities on the administrative arrangements required to minimise customs and border clearance delays for products which enjoy duty free access to both the EU27 and UK market are needed, with this dialogue being extended to arrangements for SPS inspections along triangular supply chains. Read more “Tremendous Short Term Scope for African Avocado Exports Identified Although Long Term Market Saturation in the EU Likely”
Continued Duty Free Quota Free Access to UK Market Secured but the MFN Issue Looms
Summary
LDCs and all ACP countries who have in place Economic Partnership Agreements with the EU now have in place arrangements which will roll over existing DFQF access to the UK market. However the future value of this rolled over DFQF access will be determined by the MFN tariff regime which the UK government will apply either under a no-deal Brexit or at the end of any agreed transition period in UK/EU trade relations. While the UK government announced a ‘development friendly’ temporary no-deal Brexit tariff schedule in March 2019 (with this being slightly revised in October 2019), a full scale review of the UKs temporary MFN tariff schedule is planned from January 2020, with this involving a two month period of public consultations. Following on from this review it is anticipated the UK government will make an announcement on the long term MFN tariffs it plans to apply. It is only at this point that the future value of the rolled over DFQF access granted ACP countries will finally be known. The preferential duty free access rolled over for preferred ACP partner countries adds nothing to the competitive position of ACP exporters if all other competing suppliers also enjoy duty free access as a result of the elimination of MFN duties. Read more “Continued Duty Free Quota Free Access to UK Market Secured but the MFN Issue Looms”
Exploring New Cross Channel Ferry Routes for ACP Exporters Serving UK Market via EU27 Countries
Summary
ACP exporters of short shelf life products serving the UK market via initial ports of landing in an EU27 member state will face significant challenges under a no-deal Brexit, despite the reconsolidation of duty free-quota free access to the UK market having been secured by all LDC and EPA signatory ACP countries. These ACP exporters will not only need to address the inevitable administrative challenges arising from the UK becoming a separate customs jurisdiction, but will also need to get to grips with the severe transportation disruptions a no-deal Brexit will give rise to along existing EU27/UK transportation corridors. ACP exporters using triangular trade routes will need to:
- ensure they are ready for inevitable administrative changes a no-deal Brexit will bring about (with new EORIs BOIs and BTIs being obtained where necessary);
- ensure valid certification and authorisations are in place and their exports remain compliant with labelling and marking requirement ;
- clarify the location and basis of SPS inspections of products traded along triangular supply chains (ACP/EU/UK) into the UK market;
- review and revise contractual arrangements for delivery of products to clients in the UK;
- take unilateral action to review and revise their current shipping arrangements for serving the UK market ;
- intensify dialogue with trade partners on how best to address specific Brexit related trade disruptions;
- explore the use of the new ferry services being set in place to address Brexit related transportation disruption focussed on the RORO cross channel routes centred on Kent;
- in some case seek out new direct routes to UK markets abandoning their existing triangular trade partnerships.
The EU Mercosur Agreement Part 4 Will the Mercosur Agreement Pose a Threat to Belizean Orange Juice Exports?
Summary
Spanish citrus producers are concerned the new Mercosur trade agreement could flood the EU market with frozen orange juice concentrate. This potentially impacts on frozen orange juice exporters from Belize and South African, with this being of particular concern to Belize where these exports constituted 1.3% of total exports to the EU in 2018. The conclusion of the Mercosur agreement could give added importance to exploiting the ‘rolled-over’ CARIFORUM-UK ‘Continuity Agreement’, given the potential trade disruptions which could arise from a ‘no-deal’ Brexit for the export of reconstituted orange juice and domestic EU27 orange juice to the UK. Read more “The EU Mercosur Agreement Part 4 Will the Mercosur Agreement Pose a Threat to Belizean Orange Juice Exports?”
The EU-Mercosur Agreement Part 3: Will the Mercosur Agreement Pose a Threat to the Stability of EU27 Banana Markets
Summary
EU banana producers have expressed fears over the impact any EU-Mercosur banana tariff concessions could have on the level of banana imports from Brazil. Based on recent trends in EU banana imports in response to tariff reductions these fears have solid foundations. However from an ACP perspective such fears should not be overstated with the likely market effects of increased Brazilian banana exports to the EU needing to be seen in the context of all the wider sources of pressure on the EU market position of ACP banana exporters. Individual ACP banana exporters will need to evaluate the specific implications of any new Mercosur agreement tariff concessions for the particular EU banana market components they serve. Where necessary enhanced marketing and product differentiation strategies will need to be set in place in order to maintain their current export trade to the EU. However, it needs to be recognized this will not be possible for all existing ACP banana exporters. Read more “The EU-Mercosur Agreement Part 3: Will the Mercosur Agreement Pose a Threat to the Stability of EU27 Banana Markets”
How Will ABF’s Sugar Sector Strategy Affect UK Import Demand for Sugar from Particular ACP Countries?
Summary
Under a ‘no-deal’ Brexit while concluding a ‘Continuity Agreement’ with the UK will be essential to preserving duty free-quota free access for non-least developed ACP sugar exporters, the sourcing decisions of Associated British Foods will have an important bearing on which ACP exporters will benefit from the likely increase in UK sugar prices arising from the imposition of standard MFN duties on sugar imports from EU27 countries. Competitive Southern African sugar producers closely associated with the ABF owned Illovo Group will be best placed to take advantage of UK sugar shortages and higher UK sugar prices. For Caribbean and Pacific sugar exporters the sourcing decisions of Tate & Lyle Sugars will be critical, with an important issue being the nature of the contractual arrangements to be set in place to supply sugar to the UK in the new marketing year starting 31st October 2019. Read more “How Will ABF’s Sugar Sector Strategy Affect UK Import Demand for Sugar from Particular ACP Countries?”
Vet Shortages in UK Meat Sector Could Fuel Export Surges to ACP Countries and Delay Imports under a ‘No-Deal’ Brexit
Summary
The UK meat inspection service depends heavily on veterinarians trained outside the UK. Over 90% of meat sector vets are EU nationals. A ‘no deal’ Brexit could give rise to serious staff shortages in the UK meat inspection service. This could compromise current UK beef and poultry meat exports to EU27 markets. This will be compounded by the application of standard EU 3rd country pre-import certification requirements. This is likely to displace UK meat from EU markets and give rise to export surges to targeted ACP markets. In some ACP countries this could disrupt the functioning of local meat markets and will require appropriate safeguard actions. The shortage of trained vets across the meat sector (including SPS border inspection services) could also adversely impact imports of beef from ACP countries (Namibia and Botswana). This would suggest a need to either intensify current efforts to diversify away from the UK market in their beef trade with the EU or intensify efforts to ‘Brexit-proof’ beef export supply chains from shortages of trained vets and meat inspectors within the UK border protection services. Read more “Vet Shortages in UK Meat Sector Could Fuel Export Surges to ACP Countries and Delay Imports under a ‘No-Deal’ Brexit”
Commissioner Hogan Highlights Agri-food Sector No Deal Brexit Preparations
Summary
In the event of a ‘no-deal’ Brexit EU market disturbance mitigation measures will consist of a combination of public intervention buying, aid to private storage, support for product withdrawal schemes, targeted financial assistance and support for the development of alternative markets. These instruments can be combined in various ways in light of sectoral needs, with the EC maintaining its experience of previous market disturbance in the 2014-16 period provides a wealth of experience to draw on. The experience of trade diversion to ACP markets following the August 2014 Russian import embargo is a source of concern for ACP producers. This experience suggests a need for a pro-active ACP engagement with the EC on the design and implementation of EU Brexit-related market disturbance mitigation measures, to ensure such measures take into account the interests of ACP producers and traders. Read more “Commissioner Hogan Highlights Agri-food Sector No Deal Brexit Preparations”