Summary
ACP countries account for a growing share of EU organic imports, with the Dominican Republic and bananas playing a particularly important role in this trade. In 2019 the entry into force of new EU organic regulations and the UK’s departure from the EU customs union and single market could prove disruptive, unless sensitivity is shown to the potential trade disruptions changes to trade documentation requirements can cause. In the Brexit context an extended transitional period during which the EU and UK will continue to recognize certifications issued by organic certification bodies in each other territories would appear essential. Alternatively, ACP exporters will need to seek dual certification from EU27 and UK registered bodies, with this involving additional costs and considerable uncertainty given Covid-19 related movement and social distancing restrictions.
In 2019 some 45 ACP countries accounted for 17.1% of total EU imports of organic products by volume, up from 13.6% in 2018. Between 2018 and 2019 ACP exports of organic products to the EU market increased in volume terms almost 26% (1).
This ACP trade in organic exports to the EU is dominated by the Dominican Republic, which alone accounted for 10% of EU imports of all organic products. In volume terms the Dominican Republic exported more than all other ACP countries combined. Between 2018 and 2019 Dominican organic exports increased 19.3%. The Dominican Republic is now the 3rd largest supplier of organic agri-food imports to the EU (1).
This Dominican organic product export trade was dominated by bananas which accounted for fully 9% of total EU organic imports, with Cote d’Ivoire and Ghana also having a growing volume of organic banana exports, although by no means on the scale of the Dominican Republic.
Between 2018 and 2019 EU imports of organic bananas from all sources increased from 654,000 tonnes to 749,000 tonnes (1), with the share of organic bananas in the overall EU market increasing from 10.8% to 12.5% (1, 3). According to the World Banana Forum, 95% of the Dominican Republic organic bananas are exported to the EU, where they make up around 50% of supplies (4), with there being a steady growth in the share of organic bananas in total banana exports to the EU.
Demand for banana in Europe during the Covid-19 pandemic has been strong, given the greater focus in the EU on healthy eating. What is more given bananas are cheaper per kg than apples, the Covid-19 linked economic recession in the EU could well see demand for bananas strengthening (5)
In 2019 the 4 largest markets in the EU for Dominican banana exports were the UK, Netherlands, Belgium, and Germany. The share of the UK declined in 2019 compared to 2018 in the context of 21.4% increase in the overall volume of Dominican banana exports to the EU28 and a 3.5% decline in exports to the UK. Exports to the German market meanwhile almost doubled (3). These four EU member states are also the main EU importers of all types of organic products (Netherlands 32%, Germany 13%, the UK 12%, Belgium 11%) (1).
Dominican Banana Exports to the EU by Main Member State Market (Tonnes)
| EU | UK | Netherlands | Belgium | Germany | |
| 2019 Volume | 365,197 | 134,097 | 114,115 | 40,294 | 29,138 |
| 2019 % share | 36.7% | 31.2% | 11.0% | 8.0% | |
| 2018 Volume | 300,763 | 138,979 | 71,123 | 41,091 | 14,992 |
| 2018 % share | 46.2% | 23.6% | 13.7% | 4.5% |
Source: EC, Market Access Data Base, https://madb.europa.eu/madb/statistical_form.htm
The largest African exporter of organic products however is Togo which has developed a major trade in organic soy beans to the EU (2), with exports of almost 42,000 tonnes in 2019, valued at nearly €22.8 million, or almost 11% of the value of total exports from Togo to the EU28 in 2019 (3).
While around 45 ACP countries remain involved in exporting organic products to the EU market, where only small volume are involved (under 100 tonnes) this trade is a sporadic trade. In 2019 East Timor, Equatorial Guinea, the Solomon Islands and Grenada fell out of the organic export trade to the EU, while St Lucia, Guinea Bissau, Botswana, Guinea and the Seychelles entered into an organic trade with the EU (1).
This needs to be seen in context where in the last two years 27 ACP countries in at least 1 year exported under 500 tonnes or organic products to the EU, with 17 exporting under 100 tonnes. Only 9 ACP countries export over 10,000 tonnes of organic products to the EU, with only a further 11 exporting between 1,000 and 10,000 tonnes (1).
ACP countries are also heavily involved in the export trade in organic cocoa, where once again the Dominican Republic is a leading world exporter of organic cocoa. In 2019 the Dominican Republic exported around 27% of the total volume of EU imports of organic cocoa of 66,000 tonnes (1). It is estimated that around 40% of Dominican produced organic cocoa is sold as “fine” cocoa.
In the cocoa sector organic certification is largely provided by EU27 registered agencies (BCS ÖKO-Garantie (Germany), Demeter (Germany), IMO-Control (Germany-Switzerland) (6). The Research Institute for Organic Agriculture (FiBL) provides certification oversight for the EU organic market.
| Comment and Analysis
Two major developments will take place on the EU organic market in 2019 of relevance to ACP organic exports: · The UK will leave the EU customs union and single market, with the UK no longer · The new EU Organic Regulation will enter into force together with the new Official In terms of the new EU Organic Regulations concerns had been expressed about procedural changes for the issuing of organic certification. This requires the certificate of inspection (COI) to be ‘issued by the relevant control authority or control body at the moment the consignment leaves the third country of export or origin’ (7). It was felt that this could pose problems in a number of countries where such certification cannot always be made available prior to departure of the consignment. The EC responded to these concerns by introducing modifications to the TRACES electronic reporting system to allow the information boxes related to transportation information to be ‘included in the COI within 10 days from the issuance of the COI’, but before arrival and clearance in the EU member state in which it is first landed (8) (for more details see epamonitoring.net article, ‘EU Organic Import Control Implementing Regulation Highlights Potential for Brexit Related Trade Administration Based Disruption of ACP Exports, 30 January 2020). The EC is thus demonstrating a sensitivity to how administrative changes to trade documentation could potentially prove trade disruptive. It is to be hoped the EU and UK authorities will show an equally sensitive approach to organic certification issues in the period following the UK’s departure from the EU customs union and single market. Ideally, for a transitional period (e.g. a year) both the EU and UK should continue to recognise organic certification issued by well-established bodies in either the UK or EU27. This would minimise trade disruption to what is a growing area for niche exports for ACP countries. This needs to be seen in a context where for most ACP countries the volumes involved are small and exporters and public authorities face difficulties in adjusting to administrative changes. Currently, the official EU position is that from ‘1 January 2021, the Union and the United Kingdom will be two separate regulatory and legal spaces’ and as a result ‘Certificates or authorisations issued by UK authorities or by bodies based in the United Kingdom will no longer be valid for placing products on the Union market’ (9) (see companion epamonitoring.net article, ‘Preparing for the Impact of a New EU/UK Border on ACP Exports to the EU’, 13 August 2020). The UK has adopted a similar position with the potential for non-recognition of organic certification issued by an EU27 registered certification body. This could prove disruptive of current patterns of exports of ACP organic product exports, if the concerned ACP exporters have not taken steps to ensure they have organic certification which remains valid in the EU27 and UK markets respectively or no policy initiative has been taken to ensure continued recognition of both EU27 and UK issued organic certification for ACP produce for an extended transitional period (e.g. throughout 2021). The latter option would appear the more development friendly option, since it would allow time for alternative certification to be sought as part of the normal routine process of certification renewal, thereby minimising additional costs. |
Sources
(1) EC, ‘EU imports of Organic agri-food products: Key developments in 2019’, EU Agricultural Market Brief No. 17, June 2020
https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/farming/documents/market-brief-organic-imports-june2020_en.pdf
(2) Trade for Development News, ‘Togo seeing soy in its future’, 29 March 2019
https://trade4devnews.enhancedif.org/en/impact-story/togo-seeing-soy-its-future
(3) EC, Market Access Data Base
https://madb.europa.eu/madb/statistical_form.htm
(4) World Banana Forum, ‘Organic banana production in the Dominican Republic’
http://www.fao.org/world-banana-forum/projects/good-practices/organic-production-dominican-republic/en/#.Xy–VygzaUk
(5) Freshplaza.com, ‘Overview Global Banana Market’, 24 July 2020
https://www.freshplaza.com/article/9238048/overview-global-banana-market/
(6) IICA, ‘The cocoa, a key crop that keeps the Dominican Republic as one of the leading countries in the export of organic products to the world’
https://www.iica.int/es/prensa/noticias/cocoa-key-crop-keeps-dominican-republic-one-leading-countries-export-organic
(7) EC, ‘The Commission Implementing Regulation (EU) 2020/25 amending and correcting Regulation (EC) No 1235/2008, published in the Official Journal of 14 January 2020, will enter into force on 3 February 2020’, 13 January 2020
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32020R0025&from=EN
(8) COLEACP, ‘Positive amendments regarding Commission Implementing Regulation (EU) 2020/25’, 24th January 2020
https://eservices.coleacp.org/en/actu/positive-amendments-regarding-commission-implementing-regulation-eu-202025
(9) EC, ‘Getting ready for changes Communication on readiness at the end of the transition period between the European Union and the United Kingdom’, COM (2020) 324 final, 9 July 2020
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52020DC0324&from=EN