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The TPP and fruit & vegetable trade

The TPP agreement grants new and enhanced market access in Japan, Vietnam, Malaysia, New Zealand and Brunei, countries with which the US does not currently have a free trade agreement (FTA). It also expands market access into Canada, which already has an FTA with the US.

How the Trans-Pacific Partnership (TPP) will affect trade in various fruits and vegetables is covered in a recently updated report by the USDA Foreign Agriculture Service.

The agreement, concluded on October 5 this year, is between the United States and Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The TPP agreement grants new and enhanced market access in Japan, Vietnam, Malaysia, New Zealand and Brunei, countries with which the US does not currently have a free trade agreement (FTA). It also expands market access into Canada, which already has an FTA with the US, the report says.

Tariff reductions are a core element of the TPP, under which countries have committed to “provide substantial market access for the US by either phasing out most tariffs (many immediately), enacting meaningful tariff reductions, or allowing a specific quantity of imports at a lower duty (generally zero) where tariff elimination is not possible.”

“The benefits of the TPP agreement will occur through a combination of tariff elimination, tariff reductions, and new tariff-rate quotas (TRQs),” the report says.

The following are details most relevant to trade in fresh fruit and vegetables:

CHERRIES, APPLES, PEARS

In 2014, the US exported $915 million of fresh apples, cherries, and pears to the TPP region and $1.8 billion to the world.

Japan: the 8.5% tariff for fresh cherry imports will be cut in half upon entry into force of the agreement and eliminated in 6 years. The 17% tariff for fresh apples will fall 25% immediately upon implementation and be eliminated in 11 years and the 4.8% tariff on fresh pear imports will be eliminated immediately upon implementation.
Malaysia: the 5% tariffs on fresh apples, cherries, and pears will be eliminated immediately.
Vietnam: the 10% tariffs on apples, cherries and pears will be eliminated in 3 years.
US: tariffs on fresh apples, cherries, and pears, which are as high as 0.3 cents/kg (approximately 0.2% ad valorem equivalent), will be eliminated immediately.

CITRUS FRUIT & JUICES

In 2014, the US exported $881 million of citrus and citrus juices to the TPP region and $1.5 billion to the world.

Japan: tariffs on imported oranges will be eliminated in 6-8 years. It will expand the season when tariffs are lower from June-November to April-November. During the transition period, there will be a safeguard during the December-March high-tariff season. Japan’s current orange juice tariffs will be eliminated in six-11 years. It will also eliminate its 10% duty on grapefruit over 6 years. Japan’s tariff on lemons is already fixed at zero.
Malaysia: will keep its tariffs on oranges at 0% and immediately eliminate its current 5% tariffs on grapefruit and lemons.
Vietnam: will eliminate in 3 years the current 40% tariff on grapefruit and 20% tariff on lemons. It will also eliminate tariffs on citrus juices, currently as high as 25%, in 5-8 years and eliminate the 20% tariff on oranges in 4 years.
US: will phase out tariffs on oranges, grapefruit, lemons and citrus juices in ten years or less. These tariffs are less than 3 cents/kg for citrus fruits and range up to 7.85 cents/litre for citrus juices.

OTHER FRUITS

In 2014, the US exported $1.6 billion of fruit other than citrus fruits, apples, cherries, and pears to the TPP region and $2.2 billion to the world.

Japan: tariffs, as high as 17%, will be immediately eliminated for many products, including grapes, avocados, strawberries, raspberries, blueberries, cranberries, kiwi, watermelon, and papaya. Tariffs for the vast majority of other products in this category, currently as high as 17%, will be eliminated in 11 years or less.
Malaysia: will immediately eliminate tariffs on the majority of these fruits, which currently face tariffs as high as 30%. Tariffs on tropical fruits, such as bananas and longans, will be eliminated over a 10-year period.
Vietnam: All of Vietnam’s tariffs on these fruits, currently as high as 30%, will be eliminated in 4 years or less. Vietnam’s tariff of 10% on fresh grapes will be eliminated in 3 years.
US: will eliminate tariffs as high as 29.8% in 10 years or less.

POTATOES & POTATO PRODUCTS

In 2014, the US exported $1.0 billion of potatoes and potato products to the TPP region and $1.7 billion to the world.

Japan: tariffs on fresh potatoes, which are currently as high as 4.3%, will be immediately eliminated. Japan’s 8.5% tariff on frozen whole potatoes will be eliminated in six years. Additionally, Japan’s 20% tariff on dehydrated flakes, granules, pellets, flour, meal and powder will be eliminated in six-11 years. In 2014, Japan imported more than $200 million of frozen French fries. Japan will eliminate its current 8.5% duty on frozen French fries in four years and its nine% tariff on “other prepared/preserved frozen potatoes” in six years.
Malaysia: will immediately eliminate tariffs on all potatoes and potato products, currently ranging up to eight%.
Vietnam: will eliminate tariffs on all potatoes and potato products, currently as high as 34%, within six years. It will eliminate the tariff on frozen French fries in four years.
US: will eliminate tariffs on all potatoes and potato products, currently as high as 14%, in zero-10 years.

FRESH & PROCESSED VEGETABLES

In 2014, the US exported $3.9 billion of fresh and processed vegetables (including potato and dried pulses) to the TPP region and more than $5.9 billion to the world.

Japan: will eliminate tariffs for virtually all fresh and processed vegetables. Many of Japan’s vegetable tariffs, currently as high as 17%, will be eliminated immediately as will tariffs on vegetable juices and canned and other vegetable products. These products include fresh/chilled broccoli, fresh tomatoes, fresh celery, fresh asparagus, cabbage, lettuce, chickpeas, garlic and shallots. Tariffs on other fresh and processed vegetables, including fresh sweet corn and onions, will be eliminated in 4-11 years.
Vietnam: will eliminate tariffs, currently as high as 40%, on fresh and processed vegetables in 11 years or less. It will immediately eliminate tariffs on several vegetables including asparagus, Brussels sprouts, cauliflower, celery, ginseng, peppers, and spinach.
Malaysia: will immediately eliminate tariffs, some of which are 90% or higher, on all fresh and processed vegetables.
US: will eliminate tariffs, currently as high as 29.8%, on all fresh and processed vegetables in 10 years.

Image: “Leaders of TPP member states” by Gobierno de Chile – 14.11.2010 Gira a Asia. Licensed under CC BY 2.0 via Commons

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Argentina also sees recovery in apple, pear crops

Argentina’s fresh apple production is likely to rebound to 720,000 tons and pears to 650,000 tons next year, thanks to favourable weather conditions.

Argentina’s fresh apple production is likely to rebound to 720,000 tons and pears to 650,000 tons next year, thanks to favourable weather conditions.

But even so, that’s down on the ‘normal’ levels of about 900,000 and 850,000 tons respectively due to decreased planted area as a result of the economic crisis Argentine producers have faced in the past 7-8 years, says a USDA Global Agricultural Information Network (GAIN) report.

The country’s apple and pear exports are forecast to increase to 130,000 tons and 310,000 tons, respectively, due to production increases and less fruit supplies in the Northern Hemisphere, and domestic consumption is expected to rise, also as a result of production increase, the report says.

Meanwhile, due to decreased planted area, table grape production is set to fall 10% to 100,000 tons, exports to drop slightly to 20,000 tons and domestic consumption to fall as a result of the lower production.

Distribution channels

GAIN says that the Argentine domestic fruit market is highly concentrated in Buenos Aires City and its suburbs, where over one third of the country’s total population lives, though the country’s government has been trying to decentralise it through the creation of a few fruit distribution markets in the interior of the country.

There are three channels for the distribution of fresh fruit:

  • large exporters from Alto Valle, who use the domestic market as a secondary outlet for their products and have hyper and supermarkets as their main customers
  • medium-sized firms handling smaller volumes and focused on quality
  • small companies handling small volumes that are distributed to pre-established points of sale in larger cities.

Challenges for Argentina’s fruit sector

GAIN said Argentina needs to improve the quality of its fruit, in order to meet the requirements of demanding export markets, and develop new apple and pear varieties. “Among the bicolor apples, only some Gala and Braeburn clones have succeeded in Argentina. Others, like Fuji, Jonagold and Elstar, did not adapt well to local conditions. Among yellow apples, Golden Delicious is the classic variety. Although it adapted well to Argentina’s production conditions, this variety has lost popularity due to marketing problems. Among the red varieties, Red Delicious is the most widespread variety. Since it is sterile, it must be crossed with other varieties such as Gala, Fuji, Elstar, Golden Delicious, Granny Smith, Jonathan and Ozarkgold.

“In Argentina, many Red Delicious clones, such as Starkrimson, Red Chief, Hi Early, Top Red Delicious, Oregon Spur, or Red King Oregon and Cooper 8, have been adopted. The second most important apple variety is Granny Smith. During the past few years, a shift towards the Royal Gala variety (bicolor) has occurred as international markets are demanding fewer red varieties.

“Among the most popular pear varieties, William’s accounts for about 45% of the Argentine total pear production, followed by Packham’s Triumph with a 30% share. Other varieties are Beurre D’Anjou, Red Bartlett, Abate Fetel, Beurre Bosc, Beurre Giffard, Clapps Favourite, and Red Beurre D’Anjou,” GAIN said.

Image: “Argentina orthographic” by Addicted04 – Own work with Natural Earth DataThis vector image was created with Inkscape.. Licensed under CC BY 3.0 via Commons

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US to allow import of citrus from all parts of Peru

APHIS (the USDA Animal and Plant Health Inspection) has announced it s amending fruit and vegetable regulations to allow citrus fruit from any part of Peru to be imported into the continental United States, but with conditions.

APHIS (the USDA Animal and Plant Health Inspection) has announced it s amending fruit and vegetable regulations to allow citrus fruit from any part of Peru to be imported into the continental United States, but with conditions.

A fruit fly management program must be in place, including the use of bait spray applications, registration of places of production and citrus fruit shipments must be accompanied by a phytosanitary certificate, APHIS said in a recent bulletin.

Under current regulations, the importation of citrus fruit to the US is allowed from five approved citrus-producing zones in Peru, subject to a systems approach.

“However, based on the findings of a pest list and commodity import evaluation document, we have determined that this systems approach also mitigates the plant pest risk associated with citrus fruit produced in all other areas of Peru,” APHIS said. “This action will allow the importation of citrus fruit from the entire country of Peru while continuing to provide protection against the introduction of plant pests into the continental United States.”

This final rule will be effective 30 days after publication in the Federal Register and will be available as of today (Monday, September 14) at:
http://www.regulations.gov/#!docketDetail;D=APHIS-2015-0005

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Asparagus, strawberry and onion production down this year in the US

The United States asparagus crop will be down 8% on last year, according to the USDA’s National Agricultural Statistics Service (NASS). Figures released on September 4 also show that strawberry production faces a 4% drop and that of onions 5% compared to that of 2014.

The United States asparagus crop will be down 8% on last year, according to the USDA’s National Agricultural Statistics Service (NASS).

Figures released on September 4 also show that strawberry production faces a 4% drop and that of onions 5% compared to that of 2014.

Asparagus

Production of the 2015 asparagus crop is forecast at 685,000 cwt, down 8% on 2014. Area harvested, at 23,500 acres, is down 1%. Total value of the crop, at US $75.7 million, is up 3% from 2014. Fresh production of 530,000 cwt is down 7% on a year ago.

souce. NASS

Strawberries

Strawberry production in the US is forecast at 31.1 million cwt, up 4% from 2014. Area harvested, at 52,800 acres, is down 2%
from last year. Strawberry yield is forecast at 588 cwt per acre, up 37 cwt from 2014.

“In California, warm weather led to an earlier harvest. While the drought has impacted plant growth, production and quality
were reported to be good,” the NASS report said.

Onions

Production of the 2015 onion crop is forecast at 69.1 million cwt, down 5% from 2014. Onion growers expect to harvest 133,350 acres in 2015, down 4% from last year. Spring onion growers intend to harvest 21,900 acres, down 18% from last season.

Summer, non-storage onion growers expect to harvest 18,800 acres, down 2% from a year ago, while summer storage onion growers plan to harvest 92,650 acres in 2015, down 1% from last season.

The final tally of 2014 storage onion production is 55.7 million cwt, up 10% from 2013. The 2014 storage crop is valued at $566 million, an increase of 2% from 2013, NASS said.

 

 

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EU set for lower peach, nectarine production this season

A 3.7% drop in EU peach and nectarine production – to 4 million tons – is forecast for 2015/16, while that for cherries is projected at 745,900 tons, remaining flat compared with last season, according to the USDA Foreign Agricultural Service (FAS).

A 3.7% drop in EU peach and nectarine production – to 4 million tons – is forecast for 2015/16, while that for cherries is projected at 745,900 tons, remaining flat compared with last season, according to the USDA Foreign Agricultural Service (FAS).

Despite the Russian embargo, EU-28 exports of peaches and nectarines in 2014/15 grew 16%, while those of fresh cherries fell 10%, a new Global Agricultural Information Network (GAIN) report – the EU-28 Stone Fruit Annual – from FAS says.

Peaches and nectarines

The main EU-28 producers of fresh peaches and nectarines are Italy, Spain, Greece and France. The production area is projected to remain stable in MY 2015/16 with 232,778 ha planted.

The 3.7% drop in MY 2015/16 peach and nectarine production for the EU-28 is due to unfavorable weather, with considerable decreases in the main European producers, Spain, Greece and France, while Italian production shows an increase.

In MY 2015/16 fresh consumption of peaches and nectarines is projected to remain flat reaching 2.8 MMT.

The EU’s exports of peaches and nectarines were valued at 390 million USD in MY 2014/15, a 9% decrease despite 16% higher volume from the previous year. Despite the Russian ban, EU- 28 exports increased in MY 2014/15 by reorienting the markets. The 12% decrease of exports to Russia were compensated with an increase of exports to other M.S. and to new markets such as North of Africa as Algeria and Brazil.

The main supplier of peaches to the EU-28 in MY 2014/15 was South Africa. Chile used to be the main supplier of peaches and nectarines to the EU-28 but in MY 2014/15 imports coming from Chile declined 60% resulting with South Africa and Morocco as main suppliers to the EU-28.

Due to lower production forecasts in MY 2015/16 imports may increase.

Cherries

The main EU-28 producers of fresh cherries are Poland, Italy, and Spain.

Spain is the biggest exporter due to its early season harvest and Italy the number one consumer of fresh cherries.

Total cherry production in MY 2015/16 is projected at 745,900 MT, remaining flat compared with last season, where the important growth in Italy and Greece could compensate the decline that may occur in Spain.

Consumption of fresh cherries in the EU is estimated at 443,023 MT in MY 2015/16, remaining stable.

The EU is a net exporter of cherries but with trade values almost balanced. These are sourced mostly from Turkey, the world’s leading cherry producer. While the main destinations for the major EU producers are other MS, the most important external destinations are Russia, Switzerland and Belarus.

New markets, such as Algeria, are showing important growth for the second year in a row surpassing Ukraine, the report said.

Source: EU-28 Stone Fruit Annual

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US nearly triples its fresh vegetable imports from China

The United States’ imports of fresh vegetables from China grew 185% in value to $214.3 million in the five years to 2013, a report by the US Department of Agriculture (USDA) shows.

The United States’ imports of fresh vegetables from China grew 185% in value to $214.3 million in the five years to 2013, a report by the US Department of Agriculture (USDA) shows.

Though off a much smaller base, the value of its its fresh fruit imports from China also grew over the same period, rising 61% to $21.8 million.

Meanwhile, in the opposite direction, the value of fresh fruit imports from the US by China rose 116%, to $119.5 million, and that for vegetables 719% to $3.84 million.

According to the report “China’s Growing Demand for Agricultural Imports”, China has overtaken Japan, Mexico, and Canada to become the leading export market for US agricultural products. Projections by the USDA and other sources anticipate continued growth in Chinese agricultural imports through 2023.

As for China’s agricultural exports, they are mainly labor-intensive, high-value (per unit of land) products that often require processing. US vegetable imports from China include garlic and mushrooms.

source: USDA

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Vegetable prices keep climbing in Russia

Russia’s retail sector is highly dependent on imported vegetables – particularly during the off-season. In 2014, Russia imported 2.4 million tons of fruits and vegetables making it the third largest importer globally.

Fruit and vegetables prices in Russia were up 43% in February 2015 compared to the same month last year, a new report by the US Department of Agriculture says.

Titled ‘Vegetable Prices Keep Rising’, the report on the Russian Federation blames the import restriction, in combination with a depreciating ruble, for the soaring prices.

It also says many Russian consumers are buying less vegetables or switching to cheaper ones as their purchase power drops along with Russia’s weakening economy.

Russia’s retail sector is highly dependent on imported vegetables – particularly during the off-season. In 2014, Russia imported 2.4 million tons of fruits and vegetables making it the third largest importer globally.

Screenshot 2015-06-18 at 21.09.51.png

The report also says that the most popular vegetables for Russian consumers are cabbage (21% of total vegetables volume), tomatoes (20%), onion (13%), carrot (11%), cucumbers (10%), beets (6%), pumpkin (4%), and squash (3%).

In 2014, Russia produced 15 million metric tons (MMT) of fresh vegetables which covered around 86% of total domestic consumption needs. The vast majority of all vegetables in Russia (70%) are grown by households and do not enter modern retail channels.

The main vegetables produced in Russia, besides potatoes, are cabbage (3.4 MMT), tomatoes (2.2 MMT), onions (1.9 MMT), carrots (1.6 MMT), cucumbers (1.1 MMT), pumpkins (708,000 MT), squash (508,000 MT), and garlic (248,000 MT).

Screenshot 2015-06-18 at 21.13.43.png

USDA Gain report “Russia: Vegetable Prices Keep Rising“

Click here to read more news about the Russian market. 
 

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US proposes accepting citrus from throughout Peru

Citrus fruit from the entire country of Peru could be imported into the continental United States under a change proposed by the U.S. Department of Agriculture’s Animal and Plant Health Inspection Services (APHIS).

Citrus fruit from the entire country of Peru could be imported into the continental United States under a change proposed by the U.S. Department of Agriculture’s Animal and Plant Health Inspection Services (APHIS).

Citrus imports are already allowed to the US from five approved citrus-producing zones in Peru subject to a ‘systems approach’. APHIS has determined this approach also mitigates the plant pest risk associated with citrus fruit produced in all other areas of Peru.

Currently, the regulations allow the import of fresh grapefruit, lime, mandarin, orange, tangerine or hybrids, sweet orange, and tangelo from the five approved citrus-producing zones in Peru.

The proposed rule would allow the import of these fruits from the entire country of Peru into the continental United States – excluding Hawaii and the U.S. Territories – under the same conditions currently in place.

APHIS said the change is expected to increase the area in Peru approved to produce citrus for export to the United States to about 1,500 hectares over 3 years. “Additional volumes of citrus expected to be shipped to the United States are 5,000 metric tons (MT) in the first year that the rule is in effect, 6,500 MT in the second year, and 8,000 MT in the third year. These quantities are equivalent to less than 1 percent of annual U.S. citrus production or U.S. citrus imports,” it said.

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US Government expected to make record apple buy

“The largest USDA apple purchase in history” is how the US Apple Association describes the US Department of Agriculture’s plans to buy fresh apples and processed apple products for surplus removal.

“The largest USDA apple purchase in history” is how the US Apple Association describes the US Department of Agriculture’s plans to buy fresh apples and processed apple products for surplus removal.

In its announcement of the purchase program, the USDA did not specify an amount, but the association said it would include 34.9 million pounds of fresh apples and 16.1 million pounds of processed apple products. It said the bonus buy, with an estimated value of $18.3 million, will supplement the USDA’s supply for nutrition programs, such as the school lunch program.

“Coming on the heels of what was likely the largest apple crop in US history, this USDA purchase is welcome news and we thank the department for it,” said US Apple Association president & CEO Jim Bair.

The USDA said an invitation for bid (solicitation) will be issued in the near future for deliveries August through December.

 

USDA announcement

US Apple Association press release

 

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Concerns about Ecuador’s new tariff surcharges

Imported fresh fruit – including oranges and pears – is now subject to a 45% tariff in Ecuador.

Imported fresh fruit – including oranges and pears – is now subject to a 45% tariff in Ecuador.

This comes under a new system – designed to help the country surmount a drop in oil prices and dollar appreciation – which applies surcharges of 5–45% for a period of 15 months on a wide range of goods.

According to the US Department of Agriculture (USDA), the measure was effective as of March 11 and impacts at least 461 food and agricultural product tariff lines.

A report by the USDA Foreign Agriculture Service said it will have a significant impact on the US. “This measure can potentially transform Ecuador into mere bulk commodity (e.g., wheat and cotton) and intermediate goods (e.g., soybean meal) export destination,” it said.

The Andes news agency reports there are also concerns about the move in Chile, which last year exported nearly 61,000 tons of apples to Ecuador.

 

Sources:
la Agencia de Noticias Andes: Ecuador will explain safeguard measures to Chile
USDA FAS GAIN report: Ecuador Announces Unilateral Safeguards on Food and Agricultural Products
Image: Flag-map of Ecuador by Darwinek via Wikimedia Commons