Category: Regions

Pressure Mounts for Ending of Nigerian Wheat Import Tax

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Summary
Pressure is mounting on the Nigerian government to abandon its supplementary levies on wheat imports given the failure of the Cassava Bread Development Fund to train and promote investment in the use of blended cassava/wheat flour in bread and other bakery products. Despite the levies Nigerian wheat imports have grown 30% since the 2012/13 season. The experience in the Nigerian, cassava/wheat sector highlights the need for a fully integrated approach to the development of supply chains, which encompasses multi-stakeholder buy-in prior to the launch of specific trade policy measures. The isolated and injudicious use of trade policy interventions can be counter-productive. Read more “Pressure Mounts for Ending of Nigerian Wheat Import Tax”

Sugar Reduction Target Missed But Pipeline of Pending Initiatives Encouraging

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Summary
The failure of the UK food industry to meet the voluntary 5% sugar reduction target established in 2016 is leading to increased calls for mandatory action, given the effectiveness of the Soft Drinks Industry Levy (SDIL) in stimulating reformulation efforts which resulted in an 11% reduction in sugar usage. Despite the failure to meet the ambitious first year target efforts to reduce sugar usage in food and drink products appears to on track, with this being likely to carry implications for ACP sugar exporters.

For low cost ACP sugar exporters analysing in detail the trends in sugar usage in the UK food and drink sector set out in the PHE report could assist in formulating strategies to reduce their vulnerability to the long term trend towards reduced sugar usage in food and drink products. Unfortunately for higher cost ACP sugar exporters the longer term trend in UK sugar consumption is likely to be just another nail in the coffin of their traditional sugar exports. Read more “Sugar Reduction Target Missed But Pipeline of Pending Initiatives Encouraging”

Treatment of Agriculture under a EU27/UK FTA

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Summary
Even with a comprehensive EU27/UK free trade area agreement in place it is almost inevitable that costs along EU27/UK agro-food sector supply chains will increase. It is far from clear whether the customs partnership option, maximum facilitation options or some amalgam of the two, will offer any solutions to the driving factors behind the cost increasing consequences of Brexit in the agro-food sector within the time frame envisaged for the transition period. Negotiating EU27/UK free trade arrangements in the agro-food sector is likely to prove difficult, despite the EU27’s interest in ensuring the continued free flow of agro-food exports to the UK market.

It is within this context that ACP governments will need to explore how current options under discussion can best be deployed to address the potential disruptions which could arise along triangular supply chains utilized by ACP exporters serving UK markets via EU27 member states or EU27 markets via the UK (i.e.UK-Ireland trade). Read more “Treatment of Agriculture under a EU27/UK FTA”

Problems of Re-consolidating UK Access under EU 3rd Country FTA Could Threaten UK Agriculture

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Summary
A cross party group of UK MEPs representing agricultural constituencies have requested a detailed explanation from the UK International Trade Secretary Liam Fox on how the UK government will secure continued preferential access to 3rd country markets covered by EU trade agreements, once the UK is no longer part of the EU (from 30th  March 2019). The current text of the EU27/UK Withdrawal Agreement is ambiguous on this issue, with serious WTO complications arising for 3rd country signatories of EU FTAs if they were to simply ‘roll-over’ UK preferential access once the UK was no longer part of the EU. Read more “Problems of Re-consolidating UK Access under EU 3rd Country FTA Could Threaten UK Agriculture”

EU Sugar Quota Abolition Begins to Eat at ACP/LDC Export Volumes and Earnings

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Summary
The reduction of EU sugar imports forecast to occur following the abolition of EU sugar production quotas is well underway, with exports to the sugar deficit UK market from traditional ACP sugar suppliers coming under particular pressure. Given the proposed 21 month transition period in EU27/UK trade relations this is likely to continue until at least 1st January 2021 and may extend beyond, depending on the nature of the long term post-Brexit EU27/UK trade arrangement set in place.

EU sugar exports are also growing faster than projected, with this reportedly contributing to the decline in world market sugar prices which has been underway. In the longer term growing EU export volumes could threaten production in less competitive sugar producing countries including in Africa (particularly West Africa and high cost Eastern African sugar producing countries). Against this background sugar sector trade policy could become a contested area in EU-Africa relations. Read more “EU Sugar Quota Abolition Begins to Eat at ACP/LDC Export Volumes and Earnings”

Parliament Committee Warns of Disastrous Consequences for the UK food and Drink Industry of a ‘No Deal’ Brexit

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Summary
The BEIS Committee has come out heavily in favour of maintaining as ‘frictionless’ access to the EU27 market as possible in order to protect the interests of UK processed food and drink exporters. The BEIS Committee further noted the lowering of tariffs on imports could be extremely damaging for UK farming, while bringing only marginal consumer price benefits. The importance of replicating all existing and pending EU trade deals to the UK processed food and drink sector was highlighted if growth in exports to non-EU markets is to be promoted. Amongst ACP countries particularly importance was attached to replicating the EU trade agreement with South Africa. In terms of resolving any potential conflict between maintaining access to EU27 markets and concluding new trade agreements the Committee implicitly came down in favour of concluding a comprehensive FTA with the EU27. While future close alignment of UK and EU27 agro-food sector tariffs could avert the threat of preference erosion on UK markets for products like bananas, rice, citrus fruit and other Mediterranean products, it would not assist in addressing the deteriorating position of the less efficient ACP sugar exporters on the UK market, which is linked to growing EU27 sugar exports to the sugar deficit UK market. Read more “Parliament Committee Warns of Disastrous Consequences for the UK food and Drink Industry of a ‘No Deal’ Brexit”

French Exporters Lead The Charge for African Sugar Markets

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French Exporters Lead The Charge for African Sugar Markets

Summary
The dominant role which French companies play in the expanding EU export trade in sugar to ACP countries is potentially a matter of major concern to efforts to develop intra-African trade in sugar. French companies are highly exposed to sugar exports to the UK, with any loss of the UK market arising from a ‘hard’ Brexit, requiring a 77% increase in French extra-EU sugar exports, if domestic EU27 markets are not to be disrupted by a ‘hard’ Brexit.  Such a sudden expansion of EU27 sugar exports to African markets could severely disrupt sugar markets in Africa and the efforts of competitive sub-Saharan Africa sugar producers to expand intra-African trade in sugars. It could also see an intensification of EC pressure on EPA signatories to live up to their trade agreement commitments in regard to the prohibition of the use of quantitative restrictions on imports from the EU. Read more “French Exporters Lead The Charge for African Sugar Markets”

UK Government Fails to Extend Scope of Groceries Code

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Summary
Despite evidence of some serious unfair trading practices along African-UK horticultural supply chains presented during the CGA review process the British government has declined to take any action in this area. While this is consistent with the governments’ decision not to broaden the scope of the Groceries Code and the activities of the Groceries Code Adjudicator, it sits uneasily with EU proposals to include third country supply chains in its proposed regulatory initiative on the elimination of unfair trading practices along agricultural supply chains. The raises the question as to how the UK governments plans to deal with the transposition of these new regulatory requirements into UK law during the period up to the 1st of January 2021. Read more “UK Government Fails to Extend Scope of Groceries Code”

EC Proposes New UTP Regulations Should Cover Sourcing from Developing Country Suppliers

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Summary
EC proposals to eliminate unfair trading practices along agricultural supply chains are to apply to both EU and non-EU suppliers. This is a welcome development from an ACP perspective given the regularity of UTPs along ACP-EU supply chains for fruit and vegetable products. However the benefits gained by ACP agricultural producers will be critically affected by how the regulation is implemented in practice.  It is now up to ACP governments in the countries most affected by UTPs such as Kenya, Tanzania, Ethiopia and Ghana in Africa and the Dominican Republic, Jamaica, Belize and St Lucia in the Caribbean, to ensure a designated authority is created which is empowered to ‘initiate investigations either on its own initiative or based on a complaint’ into unfair trading practices along ACP-EU supply chains. This issue could usefully be taken up under the trade chapter of the post-Cotonou ACP-EU negotiations which will be launched in August 2018. Read more “EC Proposes New UTP Regulations Should Cover Sourcing from Developing Country Suppliers”

Strong Expansion of EU Fat Filled Milk Powder Exports to West African Markets Resumes

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Summary

The large scale growth of EU fat filled milk powder exports to West Africa has resumed after a minor setback in 2016. The expansion of EU exports of fat filled milk powders since 2008 cannot be divorced from changes in EU policies on purchases of skimmed milk powders into intervention and public sector support to private storage schemes. This has stimulated product innovation which has expanded outlets for fat filled milk powders, particularly in West Africa. Equally this trade cannot be divorced from the corporate strategies of EU dairy companies which since 2013 have been investing in West Africa to develop outlets for their expanded milk production in the post-milk quota abolition period.  There is a need for greater monitoring of this trade in fat filled milk powders given the impact it can have African efforts to promote the development of local milk-to-dairy supply chains. Read more “Strong Expansion of EU Fat Filled Milk Powder Exports to West African Markets Resumes”