Summary
EU poultry meat production and consumption continues to increase, with this generating a 12% growth in exports in the first half of 2019 and the prospect of continued growth in exports up to 2021. EU poultry meat exports are once again taking off to South Africa as the December 2016 AI based import restrictions are progressively removed. The expansion of EU poultry meat exports to sub-Saharan Africa is unlikely to ease in the coming years with this posing policy dilemmas for governments where local poultry industries exist. Given current trends in EU policy, African government are likely to come under increased pressure to remove all existing non-tariff measures which inhibit EU poultry meat exports, where these are in technical violation of EPA commitments. These pressures would be intensified by a ‘No-Deal’ of ‘Hard’ Brexit from 1st January 2021. Read more “EU Exports of Poultry Meat Continue to Increase Dramatically”
Category: Poultry
Given rising food demand the poultry sector offers considerable cope for rural transformation. This arises primarily not through the formal wage employment generated on poultry farms and in poultry processing facilities but through the development of local poultry feed supply chains. However these opportunities for transformation are being undermined by growing exports of residual, low cut poultry parts to mainly African ACP markets. The EU plays a major and expanding role in this trade, with the preferential treatment negotiated for EU exporters under reciprocal trade agreements with African countries playing a major role in the expansion of EU poultry meat exports. The EU’s restrictive poultry import regime also plays a major role in promoting EU poultry meat exports. This raises important issues of policy coherence for the EU.
Consideration should be given to the promotion of the responsibly interpretation and application of the commitments entered into by ACP governments with regard to the use of non-tariff trade policy measures and the establishment of a ‘Code of Conduct for Responsible Trade in Poultry Parts’, aimed at addressing both the adverse developmental and health effects of the current EU trade in poultry parts.
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EU FTA Implementation Report Highlights the Importance of Trade Agreements to EU Agro-Food Exports
Summary
The latest EC FTA implementation report highlighted the particular importance of such agreement to EU agro-food exporters. Attention is increasingly being focused on the removal of non-tariff barriers to EU exporters in the context of the full implementation of agreed tariff reduction commitments. While in 2018 exports to sub-Sahara Africa were an exception to the overall trend in the expansion of the value of EU agro-food exports, the decline in the value of exports to sub-Saharan Africa was less marked in countries where fully implemented FTAs were in place. A review of trends in EU exports of agro-food products where the implementation of an EU FTA had been completed (the EU-South Africa TDCA) revealed that in those products where the margins of tariff preferences generated by the agreement were significant a remarkable growth in the value of EU exports occurred between 2009 and 2016, with in most of these product areas this growth continuing through to 2018 despite South Africa’s economic difficulties (though be it at a slower rate). This illustrates the true value of EU trade agreements to the EU agro-food sector in trade relations with sub-Saharan Africa. Read more “EU FTA Implementation Report Highlights the Importance of Trade Agreements to EU Agro-Food Exports”
Report Reviews Impact of Current CAP Financial Instruments on Developing Countries
Summary
A study for the European Committee of the Regions has found ‘CAP subsidies continue to have a production-stimulating effect’, with EU production and exports being greater than would be the case in the absence of CAP subsidies. The case studies in the report look at the effects of CAP subsidies in regard to milk powders, chicken meat and processed tomato products on vulnerable developing countries (VDCs – which includes all ACP countries). It draws nuanced conclusions in regard to the effects of the provision of CAP subsidies but on the basis of the terms of reference of the report largely neglects the effects of CAP related EU agricultural trade policies on VDCs. The report calls for: ‘greater disciplines on coupled support payments’; adjustment to EU market management measures so they do not destabilize prices for VDC producers; ‘the phasing out of decoupled payments for income support’, and ‘the creation of a platform allowing stakeholders from VDCs to be involved in a dialogue on PCD and agri-food trade issues’. Read more “Report Reviews Impact of Current CAP Financial Instruments on Developing Countries”
The EU-Mercosur Agreement Part 2: EU Sectoral Impacts and Implications for the ACP
Summary
The main products of concern to ACP countries where quota restricted duty free access is to be phased in for Mercosur exporters are sugar; ethanol; beef; poultry meat; and rice. The TRQ granted for sugar will reduce the margins of tariff preference enjoyed by ACP sugar exporters on EU27 markets and intensify price pressure on ACP sugar suppliers. It will make supplying the EU27 market increasingly difficulty for all but the most competitive ACP sugar exporters, unless some form of quality differentiated offering is on sale. In contrast the TRQ for ethanol is likely to have little impact on current ACP exports which are marginal. The TRQ for beef could generate increased competition on beef market components which Namibian exporters are increasingly targeting, although further investment in quality based product differentiation could serve to insulate Namibian exporters from any adverse price effects. In the poultry meat sector the new TRQ could serve to further fuel the growth in EU exports of frozen poultry parts to African market. In the rice sector given the relatively small size of the TRQ granted to Mercosur exporters it is unclear to what extent this poses a threat to ACP rice exporters in Guyana and Suriname. Read more “The EU-Mercosur Agreement Part 2: EU Sectoral Impacts and Implications for the ACP”
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”
EU Urged to Continue to Use High Tariffs to Protect EU Egg Sector
Summary
A WUR report suggests the EU egg sector would face serious competitiveness challenges from imports without continued high levels of tariff protection. While this is justified on the basis of the high regulatory standards applied in the EU, even in the absence of higher EU regulatory standards major 3rd country egg exporters would still enjoy significant cost advantages. The contradiction between the EU’s continued use of a combination of high tariffs and quantitative restrictions on imports to regulate the EU egg market and the EU’s inclusion of provisions in trade agreements with ACP countries which seek to ban the use of quantitative restriction on imports from the EU needs to be recognised and addressed through continuing to flexibly interpret and enforce such commitments in trade with ACP countries. ACP governments need to be allowed to continue to use a range of trade policy tools in trade with the EU (including quantitative restrictions) where patterns of EU exports threaten national sector development strategies and aspirations. Read more “EU Urged to Continue to Use High Tariffs to Protect EU Egg Sector”
EU Formally Challenges Application of SACU Safeguard Duties in the Poultry Sector
Summary
The EC has initiated a process leading to the establishment of an arbitration panel to rule on the validity of safeguard measures taken against EU poultry meat imports under the EU-SADC Group EPA. While many of the EC’s objections are technically correct they ignore the wider context of the evolution of EU poultry meat exports, to which tariff reduction and ‘tariff standstill’ commitments contained in the pre-existing EU-South Africa TDCA made a unique contribution prior to the introduction of SPS related import restrictions in December 2016. With the progressive lifting of these restrictions, the longer term structural trend towards increasing EU exports of poultry meat to South Africa is beginning to re-assert itself. This needs to be seen against the background of concerns a ‘no deal’ Brexit could lead to a huge surge in EU27 poultry meat exports to extra-EU markets. In this context the current EC action can be seen as part of EU ‘no-deal’ Brexit preparations. As such this raises the spectre of the aggressive pursuit by the EC of the full implementation of nominal EPA commitments, so as to open up new market possibilities for EU27 export sectors facing the prospect of severe trade and market disruptions under a ‘no-deal’ outcome to the ongoing Brexit process. Read more “EU Formally Challenges Application of SACU Safeguard Duties in the Poultry Sector”
EU Poultry Exports to Sub-Saharan Africa Once Again on the Rise
Summary
EU poultry meat exports to sub-Saharan Africa are once again on the rise after the shock of the SPS based partial closure of the South African market from December 2016. While growth is likely to continue it is unclear if the very strong growth in the first months of 2019 will be sustained. This is likely to be critically influences by the outcome of the Brexit process, with a no-deal Brexit creating enormous pressures on both EU27 and UK poultry meat exporters to find alternative markets or over 1 million tonnes of mutual trade in poultry meat. Read more “EU Poultry Exports to Sub-Saharan Africa Once Again on the Rise”
MHP Looking to Africa as Part of its On-Going Expansion Outside of Ukraine
Summary
Following its expansion into the EU the Ukrainian poultry producer MHP is looking to expand in Africa and the Middle East. This needs to be seen in the context of a projected 15% expansion of MHPs exports in 2019 and a further planned production expansion of 15% in 2019. This expanded production will need to be exported. Current Ukrainian exports are facing growing criticism from EU poultry producers because of their market effects in the EU. These criticisms are only likely to intensify in the event of a ‘no-deal’ Brexit. This could leave MHP seeking markets elsewhere, including in African countries where acquisitions are being targeted. This could then replicate the MHP practice of using locally acquired poultry processors to channel Ukrainian poultry meat on to the local market. African poultry producers and concerned African governments will need to carefully monitor the evolution of MHPs’ African investment policy. Read more “MHP Looking to Africa as Part of its On-Going Expansion Outside of Ukraine”