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Spain’s fresh produce sector steps up to the plate

Spain’s fresh produce sector steps up to the plate

The Spanish fruit and vegetable industry is playing a leading role in attenuating the impact of the Coronavirus outbreak. Across Europe, demand has been rocketing for certain products, and, according to Paco Borrás, chairman of the Export Committee at Freshfel and former commercial director of Anecoop, fruit and vegetable sales in Spain are considerably higher than normal – probably due to their renowned health benefits. To meet this demand, in the past two weeks, suppliers have been speeding up processes to be able to deliver up to 30% higher volumes; even so, this has still not been sufficient to last the entire day. Southern Spain’s growing regions have so far not been as affected as other parts of the country by the virus and have therefore been able to maintain a steady flow of supplies to the domestic market.

However, the restrictions on the movement of people are likely to jeopardise this state of affairs. While field and packhouse workers are still allowed to go to work, there are likely to be shortfalls in the workforce as family members fall sick or parents are required to stay home to look after children. Moreover, if the conditions worsen, packhouse employees may be reluctant to expose themselves to potentially becoming infected from colleagues.

Companies say that they are taking all the necessary precautions to minimise the risk of infection. These measures will involve greater costs in the operations. Also, exports to Asia have encountered logistical problems as have shipments to other parts of Europe, with delays at the borders of Italy, Austria, the Czech Republic and Slovakia. This means fewer trucks available for deliveries within Spain. Combined with the likely drop-off in demand for fruits and vegetables in the next weeks, companies are going to have to bear a great deal of uncertainty and financial cost. 

Spain’s National Federation of Transport Associations (Fenadismer) calls for exporters to cover the direct and indirect costs of the empty return. The additional expenses just for of diesel for a 2,000 km trip can mean €1,000 more per truck. Spain has 130,000 vehicles dedicated to international transport, making a combined average of 150,000 weekly trips.

Borrás notes that the key role being played by the sector in this critical moment will no doubt be remembered society at large.

 

 

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Uptick in Australia’s vegetable exports

Uptick in Australia’s vegetable exports

Credit: Alexandra Sautois

 

Australia recorded a 6.6% increase in fresh vegetable exports in 2019 to €185 million, according to Global Trade Atlas data. In volume terms, the country’s vegetable exports were up 5.4% to 230,000 tons. The main source of this growth was onions, which surged 67% to €25 million in 2019, thanks to strong demand from Europe, where there was a lack of supply. Australia’s largest fresh vegetable export in volume terms is carrots, accounting for 34% of all shipments. Australia also exports large volumes of potatoes, celery, broccoli and cauliflower.

The largest market for Australian fresh vegetables is Singapore, followed by the UAE, Japan, Malaysia and Saudi Arabia, which together received about 53% of total vegetable exports. The Ausveg body is working to help the country’s growers develop the skills and capacity to enter export markets for vegetables through the Vegetable Industry Export Programme, in partnership with Hort Innovation. In a move which should further boost exports, Australia has recently signed a free trade agreement with Indonesia.

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What can EU produce sector expect after Brexit?

What can EU produce sector expect after Brexit, Source: Freshfel
Source: Freshfel

 

 

With the UK all but certain to leave the EU in 2020, the European fruit and vegetable industry is viewing with great concern the potential impact this will have on intra-EU trade flows. A recent Rabobank report found that fresh produce will be the most affected food sector following Brexit, along with animal protein. At a time when the EU agricultural sector is still adjusting to the fallout of the Russian embargo, the potential loss of another key market could have devastating consequences.

Loss of trade would be costly on both sides of Channel

For many years now, the industry has benefited from frictionless trade thanks to single-market provisions, with the EU Mainland being a net supplier to the UK. In fact, the UK is the third largest destination for EU fruit and vegetables, receiving 3.1 million tons (€4 billion) of fresh produce each year. The two-way flows between the EU and the UK are worth €3.6 billion and account for about 10% of all intra-EU fresh produce trade. Besides generating large revenues for EU suppliers, this dynamic has left the UK heavily dependent on the EU for its fresh produce, with 55% of all the country’s imports coming from the EU-27 Member States. The main EU imports to the UK are tomatoes (480,000 tons), apples (245,000 tons), onions (230,000 tons), sweet peppers (175,000 tons), and soft citrus (164,000 tons). The largest source by far is Spain, which represents 45% of the total, followed by the Netherlands (22%), France (7%), Germany (6%) and Ireland (6%), with significant volumes imported from third countries via other EU Member States.

 

 

“55% of the UK’s fresh produce imports arrive from the EU”

 

 

The UK itself produces around 2.2 million tons of fresh produce (1.8 million tons of vegetables and 450,000 tons of fruit). Its exports to the EU total around 310,000 tons, most of which are shipped to Ireland (101,000 tons), France (90,000 tons) and the Netherlands (30,000 tons). The main trade is the re-export of bananas (64,000 tons) and other exotic fruits.

Rising prices

So, how is Brexit likely to change this picture? To answer this, multiple aspects need to be considered, such as tariffs, potential quotas, logistical hurdles, customs operations, certification, and tracing. At this point, we can only speculate about the terms of the eventual deal, as the final details of any agreement are still to be established. If the UK leaves the EU without a withdrawal agreement, then it will automatically revert to WTO trading rules in dealing with the EU. This would lead to a new tariff regime in place which would increase costs for operators in the EU and the UK who had previously benefited from zero-tariffs. What is clear, however, is that no extra tariffs will be applied to fresh produce for up to 12 months after the UK leaves the EU.

Bottlenecks and rotting produce

Secondly, border procedures and customs operations could lead to delays along the supply chain. This could have drastic consequences in the fresh fruit and vegetable trade given the perishability of the products. Trade flows are dependent on swift border procedures and customs clearance. Currently, 130,000 containers of highly perishable products arrive in the UK from the EU each year, with 55,000 containers sent from Spain alone to the port of Dover. The main bottlenecks of the EU-UK fresh produce trade are located at the ports of Dover and Rotterdam, and at the Eurostar connection in Calais. Dover is a very narrow transit port, lacking parking and storage facilities. Any new procedures will place great burden on ports and lead to backlogs, which in turn would compromise the timing of arrival and the quality of the perishable products. Morrisons supermarket chain has announced contingency plans that include switching to alternative ferry crossings, such as Le Havre-Portsmouth, if the Dover-Calais route becomes gridlocked. In turn, the Co-op supermarket chain has stated its intention to use air freight to bring in fruit to avoid empty shelves.

Ireland is particularly vulnerable given its relative geographical isolation. New border controls could result in lower supplies and higher prices for Irish consumers, too. Goods shipped between Mainland UK and Northern Ireland will also be subject to checks by UK and EU officials, which is causing particular distress in Belfast.

Higher costs

The UK may introduce different food safety regulations. This would lead to increased certification requirements, including certificates of origins, quality and phytosanitary certificates, which would constitute a further financial burden on operators. As fresh produce often arrives in mixed containers, with an average consignment comprising 10 different product categories, then based on an annual average of 130,000 containers, this would result in additional cost of up to €65 million in certification, according to a Freshfel report.

UK to turn into a rival for the EU?

The EU is concerned about what steps the UK may take to make itself a more attractive market, to the potential detriment of its European neighbours. When the UK becomes a third-country trading partner, new transhipments rules will need to be defined, governing how produce is stored and handled. If the EU wishes to retain its competitiveness as a logistical hub, it must ensure it continues to be a more attractive logistical environment than the UK, or risk losing trade. Another fear is that the UK will loosen MRL and phytosanitary requirements in order to attract imports from around the world. Such changes would have a knock-on effect on trade within the EU, where stricter rules are in place.

Less movement, less collaboration

While the movement of citizens is to be guaranteed during the transition period (up to December 2020), the current shortfall in seasonal labour in the UK is likely to be exacerbated and result in higher costs for UK producers. The field of research and innovation is also certain to be affected, with the UK one of the largest beneficiaries of Horizon 2020 funds, receiving €3.3 million in grants. For instance, the “Raditom” research project is investigating the preservation of tomato flavour, while the “EUFRUIT” project involves 12 countries focussing on coordination and information sharing.

The ideal scenario

Ultimately, the industry fears that the complexities of fresh produce trade with not be adequately considered given the limited time for negotiating exit conditions. Ideally, there would be a longer transitional period than the currently proposed 11 months (until December 2020) to allow a new free-trade agreement to be concluded and grant businesses sufficient time to adapt to any changes. An undertaking to protect the supply of EU fresh produce to the UK would defend jobs and economic growth on both sides of the Channel.

Moreover, if the UK integrates its digital customs services with those of the EU, this would help lubricate trade flows. It is vital not to reverse the great progress the sector has made in recent times. The issuing of electronic organic and phytosanitary certificates via ‘traces’ has greatly improved the monitoring and risk analysis of trade in plant products. The fine balance that has allowed the sector to flourish could be greatly undermined by any variation in price or conditions.

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Imports of Moroccan produce to Spain double in four years

Imports of Moroccan produce to Spain double in four years, credit: Alexandra Sautois, Eurofresh Distribution
Credit: Alexandra Sautois, Eurofresh Distribution

 

 

Spanish imports of fresh fruits and vegetables totalled 2.34 million tons from January to September 2019, according to the latest Fepex data. The share of imports from the EU has fallen to 50.3% from 58%. The largest suppliers were France (565,154 tons, €243 million) and Morocco (337,514 tons, €513 million). Although imports from France have fallen 13% in volume since 2015, they have grown 21% in value. Imports from Morocco have grown significantly over the same period, from 186,925 tons in January-September 2015 to 337,514 tons in January-September 2019. In terms of their value, shipments from Morocco almost doubled from €258.5 million in 2015 to €513 million in 2019 over the 9-month period. This increase in the supply of Moroccan produce is creating tough conditions on the domestic market for Spanish production.

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E.coli outbreak in US still not over

E.coli outbreak in US still not over, credit: leveland Clinic, Health essentials
Credit: Cleveland Clinic, Health essentials 

 

 

There is an ongoing investigation in the US into the outbreak of E.coli linked to romaine lettuce. On November 26, the CDC and FDA both published additional information regarding the investigation, which has so far affected 19 states of the country. The investigation is ongoing to determine the source of contamination and identify any additional products that may be linked to the illnesses.  No common grower, supplier, distributor, or food item that contains romaine lettuce has been identified that accounts for all illnesses. 

Thus far, there are 67 confirmed cases of the illness, with 39 hospitalisations. Six cases have developed hemolytic uremic syndrome. No deaths have been reported. The last illness onset date has been extended to November 14, 2019, and, at this point in time, the outbreak has not yet been declared over. The CDC continues to advise consumers not to eat romaine lettuce grown in the Salinas region.

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Freshfel Europe calls for a fresh fruit and vegetable-in-all-policies approach

Freshfel Europe calls for a fresh fruit and vegetable-in-all-policies approach

On the 2nd of December, Freshfel Europe called for a fresh fruit and vegetables-in-all-policies approach in its presentation of its 2019-2024 priorities paper for the EU institutions ‘Fresh Fruit & Vegetables for Europe’s Future’ in the European Parliament. Freshfel Europe asked policy makers to help stimulate a higher level of fresh fruit and vegetable consumption as part of an integral shift to a low environmental impact plant-based diet to protect the planet and citizens’ health. Freshfel Europe indicated that this could only be achieved through increased support for the sector in the policy-making agenda over the next five years across Europe and at all levels of government in conjunction with sector initiatives.

During the evening reception Freshfel Europe General Delegate Philippe Binard presented Freshfel Europe’s latest paper ‘Fresh Fruit & Vegetables for Europe’s Future: Freshfel Europe’s Priorities for the EU Institutions 2019-2024’ to Members of the European Parliament working on agricultural, environmental and trade issues and high-level European Commission officials. Mr Binard explained that “By helping better position the fresh fruit and vegetable sector policy makers will achieve forward-thinking coherent policy that will future-proof our planet and meet consumers’ expectations now and into 2030”. In his presentation Mr Binard also underlined that, “Fresh fruit and vegetables play a key role in Europe’s ambitions to protect the planet, provide healthy prosperous lifestyles to all and meet the Sustainable Development Goals. The beginning of this path is an ambitious and effective European Green Deal and Farm to Fork strategy that incorporates a fresh fruit and vegetables-in-all-policies approach”.

MEP Herbert Dorfmann opened the cocktail reception in the European Parliament welcoming guests and describing the importance of sustainable production in a modern world with a fast changing climate. Freshfel Europe President Stephan Weist also addressed participants asserting that actors across the EU fresh fruit and vegetable supply chain will continue to collaborate to ensure that Europe reaches the WHO recommended consumption intake of 400g of fruit and vegetables per capita per day. Mr Weist pointed out that, “21 Member States are currently not reaching this with the average consumption at 348g per capita per day. The fresh fruit and vegetable sector must be prioritized in the policy-making agenda so that these nutritious products remain an essential part of European consumers’ sustainable diet”.

Freshfel Europe’s ‘Fresh Fruit & Vegetables for Europe’s Future’ paper outlines the role of the sector in significantly contributing to a low-environmental impact future for Europe and the good health of European consumers. The paper details specific policy areas to tackle over the next five years, covering the CAP, intra-EU and global trade, the supply chain, circular economy, plant health, food safety, digitalization and health policy, to ensure that Europe is a global leader achieving a triple-win for the environment, the economy and consumer health. Freshfel Europe’s full paper ‘Fresh Fruit & Vegetables for Europe’s Future’ can be downloaded from the Freshfel Europe website here.

 

PRESS RELEASE
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Campaign to lower VAT on fruits and vegetables in Netherlands

Campaign to lower VAT on fruits and vegetables in Netherlands

 

Dutch organisations promoting healthy eating habits are calling for their government to remove VAT from fresh fruits and vegetables. In fact, there are already several European countries that have taken this step. These include Ireland, Malta, and the UK. Elsewhere, the rate is lower for fresh fruits and vegetables than for other products in some countries like Spain (4%), Latvia (5%) and Poland (5%), according to data published by EC Europe. EU regulations allow for a so-called special rate.

The Dutch are not consuming enough vegetables and are lagging behind the other Member States in this regard. Only around 30% of over-fifteen-year-olds surveyed reported that they eat fresh vegetables (excluding potatoes and juices) at least once a day. By contrast, the neighbouring Belgians are among the highest consumers of fresh vegetables, with over 70% reporting that they eat fresh vegetables at least once daily.

Photo: Lekker Holanda

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Sainsbury’s promotes frozen veg

Sainsbury’s promotes frozen veg

 

Sainsbury’s has teamed up with frozen foods specialist Birds Eye to revamp its Epsom store with a colourful ‘vegetable takeover’. The initiative is part of the UK retailer’s campaign to promote healthier eating, in this case, by adding more frozen vegetables to their trolley. It also dovetails perfectly with Birds Eye’s marketing campaign ‘Eat in Full Colour’, which highlights the benefits of frozen vegetables. In the month of October, products in the frozen aisle at the Epsom branch of Sainsbury’s will be grouped by colour in a rainbow layout to better showcase the variety of products available

Holly Callender, category planner for frozen at Sainsbury’s, said, “This activity is seeking to disrupt shoppers in store and educate them about the vast range of high-quality products available in the frozen aisle.”

 

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A date with Vietnam at the International F&V trade fair

 

From 13 – 15 August 2020, companies from across the entire fresh produce sector – from global players to small and medium-sized companies, and organisations from all over the world – will again be present in HoChiMinh City, Vietnam for the Vietnam International Trade Fair for Fruits & Vegetables. The event has space for every single sector of the fresh produce business and provides a complete picture of the latest innovations, products and services at every link in the international supply chain. It thus offers superb networking and contact opportunities to the key decision-makers in every sector of the industry.

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Increase in Spanish tomato crop

Increase in Spanish tomato crop

 

According to first official estimates for the 2019 Spanish vegetable campaigns, extra-early potato production is up 5.2%, while output of early varieties surged 24.4%. The onion crop contracted 12.9%. As for tomatoes, the “January-May” crop climbed 4.6%, and the “summer” (June-Sept) rose 5.8%, in its first estimates.

As for other vegetable crops, the largest increase was for green peas (+27%), followed by pepper (+10%), mushrooms (+8.2%), spinach (+3.7%), carrot (+3.2%), asparagus (+2.6%) and strawberry and strawberry (+ 0.1%). Meanwhile, there is expected to be a drop in output of artichoke (-11.4%), cucumber (-9.9%), radish (-6.8%), green beans (-3.9%), courgette (-2.5%) and aubergine (-1.4%). 

As for fruit crops, estimates show increases in plum (+13.4%), raspberry (+3.2%) and strabwerry (0.1%), but contractions in apricot (-26.1%), cherry (-9.9%) and peach (-1.1%).