Summary
The French government is moving ahead with a legislative initiatives designed to give farmers first say in the basis of price formation for their products, based on agreed indicators of production and marketing costs. Meanwhile private initiatives are underway to try and take the sting out of the political pressures for a more equitable distribution of value along the supply chain. Regulatory initiatives in France however are restricted to French producers and are being designed in the context of a broader agricultural sovereignty strategy. It is therefore unclear how this national French initiative will be reconciled with an EU approach which sees prohibitions on unfair trading practices being applied equally to EU and non-EU supplier. Read more “New French legislation on strengthening position of farmers in agricultural supply chains tabled”
Category: Corporates
Strong Expansion of EU Fat Filled Milk Powder Exports to West African Markets Resumes
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”
Potential Brexit Related Chocolate Trade Disruptions Highlighted in Industry Submission to Parliament
Summary
In submissions to the UK Parliament’s Business, Energy and Industrial Strategy (BEIS) Committee the European Chocolatier Ferrero has highlighted the risks Brexit poses to the functioning of its existing pan-EU28 supply chains. Concerns arise in 3 areas: the prospect of an imposition of standard 3rd country duties; the possibility of post-Brexit regulatory divergence and inadequate post-Brexit customs arrangements. Some of the solutions advanced by Ferrero could be relevant in addressing triangular trade challenges faced by ACP exporters beyond the cocoa/chocolate sector. However the structural development implications of some of these suggestions will also need to be borne in mind. Read more “Potential Brexit Related Chocolate Trade Disruptions Highlighted in Industry Submission to Parliament”
The Need for SMEs to be Prepared for the Possible Impact of Different Brexit Scenarios Highlighted
Summary
The lack of preparation by EU SMEs for a possible ‘hard’ Brexit scenario has been highlighted as an important potential threat to the future viability of many EU SMEs. The need to begin contingency planning for the possible consequences of various Brexit scenarios would appear to be relevant for indigenous ACP exporters, the vast majority of which by EU standards are SMEs. The launch by the Irish government of a ‘Be Prepared Grant’ facility to help exposed Irish enterprises plan for various Brexit contingencies could usefully be replicated for a cross section of ACP enterprises and producers associations which are most vulnerable to potential Brexit related disruptions. Funding for such an ACP focussed facility should be sought form the EC and the UK government. Read more “The Need for SMEs to be Prepared for the Possible Impact of Different Brexit Scenarios Highlighted”
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”
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”
Report Paints Grim Picture for Prospects for Integrated Dairy Sector Development in Nigeria
Summary
The PwC report paints a pessimistic picture of the future prospects for the development of Nigerian milk production, given the serious constraints on the development of commercial milk production. There is a need to recognise that if multinational dairy companies are to effectively expand local milk sourcing this will need to be part of a sector wide approach involving all dairy industry players. If not all players are on board the differential use of milk powders in the production of dairy products will create competitive pressures which individual corporate efforts to expand local milk sourcing. This may well require the targeted use of trade policy tools to ensure discipline in support of any sector wide approach. However this could fall foul of EPA provisions prohibiting the use of such tools, should Nigeria sign on to the west Africa-EU EPA. Read more “Report Paints Grim Picture for Prospects for Integrated Dairy Sector Development in Nigeria”
Tereos Expanding its Presence the East African Sugar Sector
Summary
The planned growth in beet production by Tereos growers in France and the expansion of sugar production in the Czech Republic, alongside concerns over a possible Brexit related disruption of exports to the UK is seeing a major international export drive being launched. While South Asia the main target market, a sales office has also been opened in Nairobi. Tereos also has an expanding sugar cane production presence in East Africa. These developments could greatly increase competition for less competitive African sugar producers.
Expanded EU sugar exports could also contribute to stalling ant recovery in global sugar prices, which would be bad news for all African sugar exporters, given EU price developments will increasingly shadow world market price trends post sugar production quota abolition. Read more “Tereos Expanding its Presence the East African Sugar Sector”
French producers lead way in expanding EU sugar beet production despite low global sugar prices
Summary
Both Tereos and Cristal Union have announced plans to expand sugar beet plantings by 25% in the 2017/18 season, as EU sugar companies’ battle for market position in a post-production quota EU market. The corresponding contraction of sugar production in areas less favoured for sugar production is however undermined by continued deployment of coupled sugar specific sugar to producers in 10 EU member states accounting for 35% of the total area under sugar beet in the EU in 2016/17. These payments range from €67 to €518 per ha. The trade effects of these policy driven distortions will be most severely felt by traditionally preferred ACP sugar exporters, as EU sugar imports contract and exports expand. ACP sugar exporters will need to radically rethink their market positioning strategies if they are to profitably export to the EU. Read more “French producers lead way in expanding EU sugar beet production despite low global sugar prices”
Footloose nature of EU poultry meat exports to Africa highlighted by AI restrictions
Summary
While AI outbreaks are expected to reduce EU poultry exports in 2017, there is no evidence of this in the first two months of 2017, with strong growth in EU exports to sub-Saharan African markets north of South Africa. Recent corporate takeovers in the poultry sector could lead to a strengthening of the focus on sub-Saharan African markets. Recent trends highlight the ‘footloose’ nature of EU poultry meat exports, with markets being sought where minimal import controls are applied. Read more “Footloose nature of EU poultry meat exports to Africa highlighted by AI restrictions”