In response to the new EU Trade Policy Review, Freshfel Europe is publishing a policy reflection paper, ‘SPS Export Protocols: towards greater reciprocity in fresh produce trade’. The paper summarises market access hurdles faced by the European fresh fruit and vegetables sector, which is confronted with the need to negotiate individual ‘SPS export protocols’ to start business with many trade partners, whereas similar specific protocols are not required for the majority of imports of fresh produce into the Union. This situation is leading to an appalling lack of reciprocity in SPS market access conditions that urgently needs to be addressed. In its paper, Freshfel Europe urges the European Commission to define with Member States a concrete EU SPS strategy to secure market diversification by easing market access conditions based on safe trade guaranteed by the EU regulatory environment.
SPS protocols to access third countries market are the main challenge for EU fresh fruit and vegetables exporters. Witnessing a significant lack of reciprocity in the implementation of plant health systems Freshfel Europe laments that this significant challenge is not featured in the new EU trade policy strategy ‘An Open, Sustainable and Assertive Trade Policy’, published on 18 February. Freshfel Europe General Delegate Philippe Binard noted that, “The absence of any reference to the complex challenges of negotiating SPS protocols to export fresh produce to third countries markets and the lack of reciprocity resulting thereof in SPS barriers mentioned in the EU Trade Policy Review is worrying. It indirectly suggests business as usual, leaving exporters to negotiate their market access with third countries Member State by Member State and product by product. Our experience demonstrates that the negotiating process is lengthy, costly, non-transparent and often discriminatory, exposing our exporters to different conditions for the same pest. This contrasts with EU rules for imports which are transparent and immediately applicable to all suppliers concerned to mitigate identified pests not known to occur in the EU.”
Freshfel Europe’s reflection paper explores this lack of reciprocity in plant health and calls for a fully- fledged EU SPS strategy to coordinate market access and support European exporters of fresh fruit and vegetables to overcome SPS difficulties. Natalia Santos, Freshfel Europe’s Trade & Market Access Director clarified, “On the short-term, the EU should secure proportional, scientifically justified SPS conditions and obtain additional SPS simplifications through Free Trade Agreements. Proper enforcement of partners’ commitments and the maximisation of synergies among EU capitals should also contribute to alleviate the situation and facilitate trade. In the long-run, we urge the EU to raise the problems created by SPS export protocols at WTO level, as a major trade bloc which has managed to secure a trade -friendly, transparent and proportional plant health system”. The current discrepancies between open and closed SPS systems are neither sustainable nor leading to fair and reciprocal trade in fresh fruit and vegetables. This should be among the top priorities for the EU’s trade agenda for the competitiveness and livelihood of EU growers and for the development of mutually beneficial trade relationships with partners around the world operating under a trade environment that is as least distorting as possible.
The European Union and the United States have reached an agreement to adjust the European Union’s World Trade Organisation (WTO) agricultural quotas, following the UK’s withdrawal from the EU. This is the culmination of two years of negotiations in the WTO framework to divide these EU quotas, with part of the volume remaining with the EU 27, and part going to the UK, based on recent trade flows. The agreement covers dozens of quotas and billions of euros of trade including for beef, poultry, rice, dairy products, fruits and vegetables and wines.
Commenting on the agreement reached in principle, Commissioner for Agriculture Janusz Wojciejowski said: “I am delighted we have reached agreement with our most important trade partner the US. This agreement – done inside the framework of the WTO – preserves the original volumes but shares them between the EU and the UK. It gives certainty and stability to agricultural trade and our markets. I am particularly pleased that this agreement marks the significance of our trade and economic relationship. This sends a good signal of our commitment to work together both bilaterally and in the WTO framework. I want to thank my team and our US colleagues for a job well done”.
The EU is conducting similar tariff rate quotas (TRQ) apportionment negotiations with twenty-one other partners having rights to access these quotas, and has concluded negotiations already with Argentina, Australia, Norway, Pakistan, Thailand, Indonesia and others.
Once the Commission has adopted the EU-US Agreement, it will then be sent to the Council and European Parliament for ratification, so that it can enter into force as soon as possible.
Photo: citrus of Mexico, exporter of the chinese market
China’s fresh citrus production and consumption are forecast to continue their upward trends in 2020/21, reaching 35.6 million tons and 34 million tons, respectively, according to FAS/Beijing data. However, the rate of production growth is expected to slow as prices drop and consumer demand reaches saturation point. Demand for imported citrus in 2020/21 is expected to remain low due to the economic downturn, down 25% overall from pre-COVID levels. There are also lower imports of frozen concentrate orange juice and production, indicating consumers’ changing preferences to juices made from fresh fruits. Chinese countermeasures for COVID-19 will continue to add complications and costs to all cold chain imports, including citrus.
Fresh orange imports are projected to grow slightly in 2020/21 to 290,000 tons, as the Chinese economy partially rebounds while local citrus supplies will depress import demand. Major suppliers remain Egypt, South Africa, Australia, the US, and Spain. China’s total imports of fresh oranges dropped dramatically in 2019/20, due to the sudden increase in freight costs and labour impacts of COVID-19. Before the pandemic, China’s orange imports had witnessed seven consecutive years of growth. Imports from all sources fell Egypt (-41%), South Africa (-15%), Australia (-37%), and Spain (-80%).
Meanwhile, China’s orange exports are expected to increase 5% y-o-y to 55,000 tons, thanks to restored logistics, the increased crop size, and rebounding economies. 2019/20 exports totalled 52,000 tons, with Vietnam accounting for 60% of the volume. Other export destinations for fresh Chinese oranges are the Philippines, Malaysia, Russia, Hong Kong, and Thailand.
India’s 2019/20 crop totalled 2.28 million tons, 21% lower than the previous year’s volume due to adverse weather and many vineyards infested by fungal diseases, which affected grape quality. USDA estimates for 2020/21 are for a similar volume. India is a major consumer of grapes. In 2020/21, imports are expected to rise 8% to 8,000 tons due to decreased domestic supplies. China accounts for around two-thirds of the imported volume, followed by Afghanistan (9%) and the US (8%).
India is also a major exporter of fresh table grapes. 2020/21 table grape exports are projected at 150,000 tons, down 19% from 2019/20, due to lower production and reduced product quality. Over 50% of Indian grape exports are shipped to the EU and the UK. The top three destinations are the Netherlands (29%), Bangladesh (17%), and Russia (12%).
The global peach and nectarine crop is estimated to fall 5% to 21.0 million tons, due to adverse weather conditions in top producers China and the EU, according to USDA/FAS data. The reduced harvest is expected to lower global exports.
After the bumper 2019 crop, the EU’s 2020 harvest is predicted down 15% to 3.5 million tons, due to a variety of damaging weather events in leading producers Spain, Italy, Greece, and France. In addition, a saturated market in recent years has led to reduced planted area in Spain, Italy, and France, with Spain shifting some production towards tree nuts. Exports are forecast down 13% to 155,000 tons. However, imports are only marginally up as domestic supplies can meet most local demand.
In China, heavy snow in April caused damage during fruit set and is expected to the crop by 3% to 14.5 million tons. Exports are projected to plummet 33% to 80,000 tons as Russia continues its ban on imports of fruit from China. Russia was China’s third-largest market until August 2019, when phytosanitary concerns led to a ban. China’s imports are expected forecast up jump 40% to 38,000 tons, with much of the rise due to greater shipments from Chile before COVID-19 disruptions had an impact.
The world’s 2020 cherry production is expected to forecast to rise 1.5% to 3.9 million tons, due to a rise in outpUS as the second largest exporter. Exports are further boosted by Turkey gaining market access to Chinut in Turkey, Chile, and China, which more than offset losses in the EU and US, according to USDA/FAS data. Increased supplies are expected to increase exports slightly to 503,000 tons, especially from Chile and Turkey.
EU production is expected to slip 4.7% to 703,000 due to spring frosts and heavy rains. Fruit quality is expected to be good, and exports are predicted to remain nearly unchanged at 8,000 tons. Imports are expected to rise 13% to 60,000 tons, especially from Turkey.
Turkey’s cherry crop is estimated up 8% to 918,000 tons thanks to favourable growing conditions. This is the sixth consecutive year of growth, fuelled by producers transitioning to high density plantings of high-yield varieties. Turkey’s exports of 90,000 tons (especially to the EU and Russia), mean that it overtakes the a and South Korea in 2019.
China’s production is forecast up 7% to 450,000 tons, continuing the recent growth trend. Imports are expected to drop 4% to 220,000 tons, due to the impact of the Covid-19 pandemic.
The US crop is estimated to fall 9.5% to 383,000, due to severe frosts in Washington more than offsetting gains in California and Oregon. The smaller crop is expected to reduce exports 17% to 70,000 tons. Imports are up slightly to 12,000 tons, mainly from Chile.
As China’s economy begins to recover, Chilean fruit exporters breathe a sigh of relief. At a virtual conference organised by Fedefruta on Wednesday, Chile’s ambassador to China, Luis Schmidt, said that Chilean fruit exports had increased in recent months, as China gets back onto its feet after the Covid-19 pandemic. At the same time, Chile has been intensifying its efforts to comply with China’s demanding phytosanitary regulations.
Schmidt expects 2020/21 to be a good cherry season for Chilean exports. Cherry exports between January and August 2020 were up 6% to 145,000 tons (US$954 million, -7%) compared to the same period in 2019. China received 94% of the total. As its main trade partner, exports to China are becoming ever more crucial to Chile’s economy. This year, China has received 37% of Chile’s total export volume.
According to the latest data, Chilean fresh fruit exports dropped 7% to 2.13 million tons between January and August this year and were worth US$3.757 billion (-12% from the same period last year). Grape exports were down 7% to 600,600 tons (US$968 million, -21%). The US (45%) is the biggest market for Chile’s grapes, followed by China (18%).
Turkey is set to become a key player in Asian fruit and vegetable markets. The country is currently in advanced negotiations to secure access for its wide range of fresh produce to key markets such as China, Japan, Thailand and the Philippines, among others. Turkey’s Minister of Trade, Ruhsar Pekcan announced the acceleration in the country’s plan to diversify its fresh fruit and vegetable exports. Turkey currently is authorised to ship cherries to China and South Korea. Pekcan said that she soon expects China to authorise shipments of Turkish citrus, apples, grapes and pomegranate. Turkey is the world’s third largest apple producer (3 million tons per year) and Turkish apples have recently entered Thailand, with the Philippines set to follow suit. India, the Middle East and Russia are currently the main destinations for Turkey’s fresh produce exports.
Global peach and nectarine harvest is expected to set a new record of 22.3 million tons in 2019 (+10%), as orchards in China, the EU, and the US recover from the weather-hit 2018 campaign, according to USDA data. The growth in supply is expected to boost imports and exports.
China’s harvest production is estimated to break all records, reaching 15.0 million tons (+9.7), thanks to favourable growing conditions in the Shandong province. Accordingly, exports are set to rise almost 60% to 100,000 tons, driven by higher shipments to Vietnam. Imports are also set to rise (to 28,000 tons), with arrivals from Chile and Australia, the latter having recently signed a bilateral Free Trade Agreement with China.
US production is up almost 20% to 814,000 tons, thanks to excellent conditions during critical points of the season. The larger crop will raise exports to 75,000 tons (mainly to Mexico and Canada), while imports are expected to fall, due to lower shipments from Chile.
A large EU crop is expected, with output up 7% to 4.1 million tons. The increased supplies are expected to drive exports up by almost 30% to 200,000 tons, while lowering imports to 30,000 tons.
EU imports of fresh tomato have climbed steadily since 2015, from 481,000 tons to 628,000 tons in 2018. The largest non-EU supplier by far is Morocco. Imports from the North African country climbed 10.7% in 2018 to reach 449,700 tons. While tomato exports from Turkey plummeted between 2009 and 2013 (from 105,000 tons to 29,000 tons), they have since risen steadily, reaching 108,000 tons in 2018 – an increase of 6.5% from 2017. Israel is no longer the major source of tomatoes it once was. Between 2009 and 2018, shipment volumes fell from 25,000 tons to just 639 tons.
Source: European Commission
Meanwhile, exports of fresh tomato beyond the EU have plunged since 2013, as the Russian market is no longer available. In 2013, shipments stood at 369,000 tons, but by 2018, they had fallen to just 117,000 tons. Volumes have shrunk to both Russia and Belarus (8,100 tons and 32,200 tons respectively in 2018), while they’ve remained stable to the other major destinations: Switzerland (27,200 tons) and Norway (23,800 tons).