Summary
The EU has moved swiftly to unlock Covid-19 blocked development expenditures for redeployment to meeting immediate health crisis and longer term structural economic needs. To date the EU framework for effectively supporting a recovery in trade and production in ACP countries is still under development, with ACP farmers organisations and agri-food sector associations urgently needing to initiate a dialogue with the local EU delegate to assist in defining the approach to be adopted by the EU locally in supporting the restoration of production and trade in the face of the ongoing Covid-19 pandemic. There is a need to ensure EU action in support of economic recovery focuses on the specific needs of farmers and agri-food sector enterprises, given the potentially serious food and livelihood security issues raised by the ongoing pandemic. Read more “EU Moves Swiftly to Redeploy Existing Funds to Meet Immediate Crisis and Long-Term Structural Needs”
Category: Caribbean
Growing Cold Store Shortage Generating Further Additional Costs in Serving European Markets
Summary
The Covid-19 surge in demand for cold storage space is generating significant increases in cold storage charges and an absolute shortage of space in Europe. In the case of the UK this situation is being compounded by the growing prospect of a no-deal UK departure from the EU customs union. This will generate yet another cost increase for ACP agri-food exporters of fresh products which require cold storage before delivery to final customers. This suggests ACP exporters of products requiring cold storage need to shorten their supply chains through the establishment of arrangements for direct delivery of goods to final buyers. This would allow these ACP exporters to side-step the commercial costs of the worsening cold storage availability situation in not only the UK but elsewhere in Europe. Smaller ACP exporters may need to explore their options for accessing the ‘Airbnb’ model of cold store provision. Read more “Growing Cold Store Shortage Generating Further Additional Costs in Serving European Markets”
What Future Air Passenger Flight Based Cargo Services?
Summary
The collapse of global air passenger has reduced cargo capacity and led to higher air freight rates for ACP horticulture and floriculture exporters. Analysis suggest air passenger numbers in Africa and Europe are unlikely to recover to pre-Covid19 levels fort five years, with Africa-Europe intercontinental air services likely to be similarly limited. East Africa is likely to be seriously affected, with exporters needing to explore the scope for: interim air freight solutions between East Africa and major EU27 and UK markets; the development of a commercially sustainable dedicated model for air freight shipments between east Africa and Europe and rethinking the basket of products air freighted to Europe given increased air freight charges. Regionally based air cargo services could usefully be designated as a sector where ‘strategic autonomy’ should be promoted, with international assistance being sought in pursuit of this goal. Read more “What Future Air Passenger Flight Based Cargo Services?”
Grim Sugar Market Prospects Will Require Better ACP Marketing to Exploit Available Evolving Opportunities
Summary
The nascent recovery of the EU sugar market which was getting underway in the 2019/20 marketing year has been reversed by the Covid-19 pandemic. The collapse of global sugar prices is making raw cane sugar imports cheaper and EU sugar exports less competitive. While some ACP sugar exporters are increasingly focussed on trade into sugar deficit markets in the EU (region 3), where prices are on average stronger, these average prices mask large differences in contracted prices and between different contracted prices and spot market prices. This makes marketing strategies and contract negotiations critical to the overall revenue position of ACP sugar exporters to the EU market. Other ACP exporters remain dependent on the UK market where profound uncertainties are faced. The future basis for UK/EU trade and the arrangements for the management of the UK’s Autonomous Tariff Quota will be critical to future UK sugar market price developments. With the recessionary effects of Covid-19 likely to profoundly impact on sugar sector consumption and the structure of demand, ACP exporters will need to pay close attention to evolving policy developments and market conditions in the coming 6 months. Read more “Grim Sugar Market Prospects Will Require Better ACP Marketing to Exploit Available Evolving Opportunities”
The Caribbean and the Outcome of the UK MFN Tariff Review
Summary
Despite earlier fears the UK’s proposed future schedule has largely left unaffected MFN tariffs on agri-food products of export interest to Caribbean ACP countries. The principal issues now faced in future agri-food sector exports to the UK arise in the context of a possible ‘no-deal’ departure of the UK from the EU customs union and single market. These include: the need to ensure the continued smooth functioning of triangular supply chains given the regions limited shipping service options; the future evolution of EU sugar prices and the sourcing decisions of Tate & Lyle Sugars; the future basis of access for African banana exporters in the absence of rolled over UK-only ‘Continuity Agreements’ with Ghana, Cameroon and Cote d’Ivoire and the Covid-19 related interruption of negotiations; and the future phytosanitary imports controls to be applied to UK citrus imports. Read more “The Caribbean and the Outcome of the UK MFN Tariff Review”
Future UK Only MFN Tariff Schedule Announced
Summary
After much speculation, the MFN tariffs on most agricultural and food products of greatest export intertest to ACP countries have been retained largely unchanged by the UK government. This will bring considerable relief to ACP banana, sugar, canned tuna, and value-added cocoa product exporters, where fears of the adoption of a ‘zero production-zero tariff’ approach had arisen. Across a range of other areas, relatively minor tariff reductions are unlikely to carry serious trade implications for ACP agri-food product exporters. The only area of uncertainty arises from the removal of the EU entry price system currently applied to a range of products and its replacement by simpler ad valorem import duties. It is unclear what the commercial impact of this change will be on individual ACP exporters of specific products. Read more “Future UK Only MFN Tariff Schedule Announced”
Restrictions on Poultry Meat Imports Called for in the Face of Covid-19 Impact on EU Poultry Market
Summary
The European Poultry Producers Association (AVEC) has called for the EC to review the application of its TRQ based import regime for poultry meat to ensure import levels reflect the collapse of demand for out-of-home poultry meat consumption. With the EC being a strong advocate of open markets and with trade disputes pending in the poultry sector to remove barriers to EU exports, it will be worthwhile monitoring the EC’s response to AVEC’s call to limit imports via a review of how the TRQ regime for poultry meat is managed. Read more “Restrictions on Poultry Meat Imports Called for in the Face of Covid-19 Impact on EU Poultry Market”
Growing Calls for an Extension of the EU-UK Transitional Period in the face of COVID-19 Economic Disruptions
Summary
The UK freight industry and British Chambers of Commerce have explicitly called for an extension of the transition period in E/UK relations, while the UK food and drinks industry has called for concerted action to avoid further trade disruptions which would compound the adverse economic effects of the Covids-19 pandemic. UK private sector bodies maintain neither business not the UK border services are prepared to implement customs and other border controls on trade with the EU from the 1st January 2021, given the disruptions to preparations which the Covid-19 pandemic has generated. While these difficulties are recognised and there is a dawning awareness in the UK government of the need to avoid a no-deal exit from the EU customs union, it appears no one in the UK government knows how politically to avoid this outcome. Against this background ACP businesses will need to start making preparation for a no-deal UK departure from the EU customs union and single market on 1st January 2021. Read more “Growing Calls for an Extension of the EU-UK Transitional Period in the face of COVID-19 Economic Disruptions”
Linking Bail Outs to Broader Policy Objectives
Summary
With both European airlines and cross channel ferry companies seeking multi-billion Euro government financed assistance programmes in the face of COVID-19 related disruptions of passenger services, the debate is underway on the need to link such public financing to wider policy objectives (e.g. GHG emission reduction targets). In this context there is also a need to link such public assistance to other broader objectives such as a restoration of freight charges for essential goods to pre-COVID-19 levels and the maintenance of freight handling capacity at pre-COVID-19 levels. This would assist in restoring existing ACP-EU supply chains for fresh fruit and vegetable imports, in the face of the severe disruptions the COVID-19 pandemic has given rise to. This would aid economic recovery in those African and Caribbean countries whose export orientated horticultural sectors have been severely disrupted by the pandemic. It would in addition help secure fresh fruit and vegetable supplies to meet the surging consumer demand for healthy eating options in those European countries with a high import dependence for fresh fruit and vegetable supplies. Read more “Linking Bail Outs to Broader Policy Objectives”
Growing Covid19 Related Concerns Over Fresh Food Supply Chains Could Carry Longer Term Implications
Summary
Covid-19 linked air freight, sea freight, road freight and port disruptions are placing strains on fruit and vegetable supply chains serving the UK and EU markets. Movement restrictions are leading to labour shortages which threaten future domestic European fruit and vegetable production. This is likely to push up prices throughout 2020, with this continuing well into 2021 for the UK, if the UK governments chooses at the end of 2020 to leave the EU customs union without a trade deal being in place. This is seeing a growing focus on shortening supply chains, with this likely to make itself felt first through the revision of supermarket sourcing practices. ACP governments should look to supporting policy responses to the Covid-19 trade disruptions across Europe which also address longer term issues in relations with the UK, including deferring the UK’s departure from the EU customs union to allow trade to recover from the devastation of in the post Covid-19 pandemic. ACP private sector exporters meanwhile should examine how they can cost effectively shorten their supply chains to reduce their vulnerability to future transportation disruptions, in a context where the transport sector knock-on effects of recent developments are likely to be felt for some years to come. Read more “Growing Covid19 Related Concerns Over Fresh Food Supply Chains Could Carry Longer Term Implications”