On 22 February 2018 ACT Alliance convened Seminar on the Implications of Brexit in the agro-food sector for ACP countries and for the forthcoming ACP-EU Post-Cotonou negotiations. A series of twelve 2 page summary notes were produced for the seminar covering both substantive issues arising within the Brexit process and the current state of play in the Brexit process. Note 2 provided an exploration of the vulnerability of ACP Members to a loss of preferential access to the UK market. Read more “ACP Members Vulnerability to the Loss of Preferential Access to the UK Market”
Category: Regions
Arla Plans Expanded Investment in Production of Milk Powder for Export to Africa
Summary
Arla’s investment plans have a strong focus on serving growing markets for dairy products beyond the EU’s borders. One element of this is through the expansion of EU based milk powder production. This is closely linked to investments made in Ivory Coast, Nigeria, Senegal and Ghana in repackaging facilities which use imported milk powders to produce individual consumer ready portions of milk powder which can be reconstituted at home. These investments involve local partners with well-developed distribution networks. However none of these local partners are involved in local milk production. This sits uneasily with Arla’s commitment to avoiding unintended consequences for local farmers in a context where serious structural and economic constraints are faced in developing local milk-to-dairy supply chains. In the long term given the projected shortage of global milk supplies by the mid- 2030s in the face of rising global demand for dairy product and the production constraints impending in major milk exporting countries this is an important structural development issue. Read more “Arla Plans Expanded Investment in Production of Milk Powder for Export to Africa”
Planned Northern Sugar Project in Yorkshire to ‘Die a Death’
Summary
The virtual cancellation of the Northern Sugar Project in Yorkshire, alongside processing difficulties at British Sugar, means the initially projected large scale expansion of UK beet based sugar production post-Brexit is now unlikely to occur. This could provide relief to the financial difficulties of Tate & Lyle Sugar, but only if it is accompanied by a firm commitment by the UK government to the abolition of the CXL duty once the UK is freed from EU rules and regulations. ASR is likely to intensify pressure for a firm UK government commitment in this regard. However this will carry different implications for different ACP sugar suppliers, depending on how the situation develops. However it should be noted Caribbean and Pacific suppliers will remain the most vulnerable to future policy developments. Read more “Planned Northern Sugar Project in Yorkshire to ‘Die a Death’”
The EC’s Recommendations for the Post-Cotonou Negotiations: Some Implications for ACP Agro-food Sectors
Summary
The EC communication on the Post Cotonou ACP-EU negotiations has bene described as ‘a confusing mixture of liberalisation and positive policy recommendations’. There are some areas which could be built on for the benefit of ACP agricultural producers and exporters, but there are also areas which could narrow the options which ACP governments have for supporting integrated agro-food sector development. The growing EU member states focus on ensuring EU interests are more effectively promoted through the future ACP-EU partnership, alongside a growing focus on migration and security areas as well as the promoting the economic interests of EU companies in ACP markets is unlikely to lead to any substantive changes which enhance the contribution of the EU-ACP partnership to the integrated development of ACP agro-food sectors. However this remains a terrain of political struggle with a key question being: how effectively prepared are ACP structures and institutions for engaging in the political struggle which lies ahead in the post-Cotonou ACP-EU partnership negotiations. Read more “The EC’s Recommendations for the Post-Cotonou Negotiations: Some Implications for ACP Agro-food Sectors”
Current High Volume of EU Skimmed Milk Powder (SMP) Exports to be Sustained and Expanded
Summary
The recent expansion of EU SMP exports is set to continue, initially at current elevated level but subsequently at substantially expanded levels. By 2030 EU SMP exports are projected to be 65% above those witnessed in 2016. Throughout this period EU SMP prices are projected to be between 13% (beginning of the period) and 3% (end of the period) below world market SMP prices. This is likely to act as a drag on world market SMP price recovery. These price trends cannot be delinked from the high levels of EU public sector support to both public and private storage schemes for SMP. These public policy interventions schemes give rise to supply responses to low prices by EU diary companies which simply do not correspond with the normal functioning of markets. These high EU SMP export volumes and low prices overshadow national efforts in ACP countries to develop local milk-to-dairy supply chains. This is being compounded by the rapid growth in EU exports of fat filled milk powders (FFMP). These trade trends appear to be undermining efforts to expand local milk production in African countries in response to growing local demand for dairy products. Read more “Current High Volume of EU Skimmed Milk Powder (SMP) Exports to be Sustained and Expanded”
Global Sugar Market Trends Could Increase Pressure on ACP Exporters to the EU Market
Summary
The EC has argued sugar imports under the CXL scheme will be discouraged in the coming period, given the much lower average EU market price premium. However world market sugar prices have got off to a bad start in 2018, losing 10.4% of their value by mid-January. These lower average world market sugar prices, by increasing the EU market price premium to around 22% above the EU’s CXL duty could encourage increased volumes of CXL sugar imports into the EU. This would then intensify competition for ACP sugar suppliers, in the context of a halving of EU import demand. This could potentially accelerate the process by which high cost ACP suppliers are squeezed out of the EU sugar market. Read more “Global Sugar Market Trends Could Increase Pressure on ACP Exporters to the EU Market”
Declining Prices of Dark Meat Intensify Competition for African Poultry Producers
Summary
While on global market price of whole chickens and breast meat remain strong, ‘dark’ meat prices are falling. This is a source of concern to sub-Saharan African poultry producers. Leading EU poultry producers are increasingly targeting African market. In this context an over vigorous implementation of EPA commitments on the elimination of non-tariff barriers to import from the EU could see African markets increasingly opened up to rapidly expanding EU poultry meat exports. This could carry serious consequences for African poultry meat producers, in a context where considerable rural income earning opportunities can be generated along poultry feed supply chains. Read more “Declining Prices of Dark Meat Intensify Competition for African Poultry Producers”
Health Based Sugar Taxes Gaining Ground Globally
Summary
Health based sugar taxes are increasingly a global phenomenon, with sugar taxes now in use or pending in Europe, the Caribbean, Latin America, North America, Asia, Australasia, the Middle East, and Africa. The prospect of sugar taxes is also stimulating food and drink industry product reformulation initiatives, with varying levels of industry commitment. Some ACP sugar exporters are responding to shifting patterns of global demand growth and moving away from their traditional EU focus. All ACP sugar exporters will need a better understanding of the end use to which their sugar exports are put in order to assess their vulnerability to trends in reduced use of ‘hidden sugars’ in the food and drinks industry. Read more “Health Based Sugar Taxes Gaining Ground Globally”
Implications of Improving Phytosanitary Control Systems for the Attainment of SDGs
Summary
Investments in strengthening SPS control systems in ACP countries can only be effective in contributing to the SDG objectives of poverty eradication and ending hunger if complemented by additional initiatives. Firstly initiatives to end unfair trading practices (UTPs) along ACP-EU agro-food sector supply chains through the extension of scheduled EU regulatory initiatives to combat UTPs to ACP-EU supply chains. Secondly initiatives to improve the design and implementation of EU SPS control requirements in ways which take into account the mode of production used by smallholder producers, while ensuring the integrity of arrangement for attaining underlying SPS policy objectives. Read more “Implications of Improving Phytosanitary Control Systems for the Attainment of SDGs”
Growing Role of Ukraine in EU Poultry Meat Imports Raises Rules of Origin and SPS issues in EU Poultry Meat Export Trade
Summary
The processing in EU member states of poultry birds raised and slaughtered in the Ukraine raises both important rules of origin issues in the EU poultry meat export trade with ACP countries (particularly South Africa) and important SPS control concerns (given the initial origin of the birds is being disguised through the cutting and packaging operations carried out in EU member states). This expanding trade suggests a need for stricter proof of origin documentation requirements on poultry meat imports from the EU both on SPS and rules of origin grounds. The rules of origin dimension is particularly important where reciprocal preferential trade agreements covering poultry meat are under implementation (e.g. under the SADC-EU EPA). Read more “Growing Role of Ukraine in EU Poultry Meat Imports Raises Rules of Origin and SPS issues in EU Poultry Meat Export Trade”