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Recent impact of Russian ban on prices for certain EU produce

European Commission presentation on the impact of the Russian import ban on prices for certain fruits and vegetables.

There’s been an upward trend for mushroom prices and stable prices for pears, carrots, kiwis, and oranges and lemons in the EU, according to the European Commission.

But the price situation for tomatoes and peppers has been mixed and there’s been a downward trend for apples.

That’s according to a presentation on the impact of the Russian import ban on prices for certain fruits and vegetables which the Agriculture and Rural Development Directorate made at the February 17 meeting of the Committee for the Common Organisation of the Agricultural Markets.

Hightlights of the presentation include:

MARKET UPDATE

Apples
Prices decreased in the two Member States with the lowest prices (-6.8% to 20 EUR/100 kg in PL and -4% to 26.6 EUR/100 kg in DE).
Pears
Prices registered stability (current prices are 8.8% under the historical average).
Citrus
Prices over 3-year average (22.2% higher for oranges and 6.7% for lemons).
Tomatoes
Significant price reduction in IT and moderate in ES (current average for tomatoes is 9,8% above the 3- year average).

MARKET CONTEXT

Exchange rates of Dollar to both Euro and Zloty: extra-EU exports and opening new export markets more attractive, helping to restore market balance.
New export destinations: The US has lifted an old ban on imports of French apples and pears from, following a bilateral agreement on sanitary controls.
Lower supply in Southern EU due to adverse weather conditions and low temperatures: Positive impact on prices.

SUMMARY MARKET SITUATION

Positive trend:
Mushrooms (downward trend reversed last week)
Price stability:
Pears (BE price = 46.5)
Carrots (lowest prices in NL & PL)
Kiwis (prices much higher than 3-year average)
Oranges & lemons
Downward trend:
Apples (20 EUR/100 kg in PL and 26.6 in DE)
Mixed situation:
Tomatoes
Peppers
 

 

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source:
Evolution of EU prices of certain F&V
European Commission DG Agriculture and Rural Development Directorate C. Single CMO, economics and analysis of agricultural markets

 

 

 

 

 

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Opportunities in the EU for US exporters of organic produce

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The growing market for organic products in the EU offers opportunities for US exporters affecting various kinds of produce, a new report by the US Department of Agriculture says.

The USDA said while trade is generally determined mainly by quality, price and local availability and demand, opportunities for US exporters include:

  • Sweet potatoes: the market for sweet potatoes is growing. EU demand for potato varieties is up. The US is the best year round supplier of sweet potatoes at competitive prices.

  • Fresh vegetables like onions, broccoli and lettuce: especially the UK.

  • Fresh fruit: especially in those countries with no local availability, there is demand for a great variety of fresh fruit from the US. There is seasonal (October through March) demand for apples and pears in northwestern Europe. Demand in the same region is also strong for US citrus (grapefruit and minneola). There is year round demand for fresh, dried, sweetened cranberries and demand continues to grow. Growing demand for other fruits includes grapes, strawberries and cherries.

Trade in organic products between the US and the EU

The report says that from 2011 to 2014, the largest increase in US exports of organic produce to the EU occurred in fresh grapes and reached USD 4.7 million in 2014 (2011: USD 0.8 million). In 2014, the value of US organic grape exports to the EU exceeded the export value of organic apples which used to be the most important US organic export commodity in 2012 and 2013.

Other important US organic export products to the EU after grapes and apples include strawberries, blueberries, peppers, and cauliflowers.

In 2014, most US organic exports to the EU occurred during October (grapes and apples) and November (grapes).

US exports to the EU of organic products which are covered by HS codes (introduced in 2011) reached USD 12.3 million in 2014. This compares to an increase of 77 percent from 2011 to 2014, the USDA said.

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Figure 2. Top 10 EU countries with the highest organic sales USD per person, 2013 figures

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Top 10 largest organic markets in the EU, million USD, 2013 figures

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Read “Plenty of opportunities for U.S. organics in the EU market”

USDA Foreign Agricultral Service (FAS) Global Agricultural Information Network (GAIN) report

 

 

 
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EU competition watchdog to check if Carrefour breaching rules

The European Commission is looking into whether Carrefour’s policy of offering only “France Origin” seasonable vegetables in nearly 1,200 of its stores in France breaches competition rules.

The European Commission is looking into whether French retail giant Carrefour’s new policy of offering only ‘France Origin’ seasonable vegetables in nearly 1,200 of its stores in France may breach competition rules.

Margrethe Vestager, European commissioner for Competition, said the Commission is currently looking into the issues and liaising with the French competition authority.

“It appears from the press release issued in November that Carrefour and France’s federation of vegetable producers announced a new partnership agreement to offer only ‘France Origin’ seasonable vegetables in Carrefour’s 1,200 retail stores in France.”

“It is a priority of the Commission to protect the internal market and avoid restrictions of competition to the detriment of the consumer. It appears from the announcement in question that imported products will not be sold in Carrefour’s shops in France. In order to investigate whether the situation, and in particular this partnership, entails a breach of competition rules a number of facts would need to be ascertained.”

“The Commission is currently looking into these issues and liaising with the French competition authority,” she said.

Dutch MEP asks what what action will be taken if rules are being broken

Vestager was responding to a written question from Dutch MEP Jan Huitema (ALDE), who began by saying that the Carrefour announcement in November that in the next 10 months it would purchase fruit and vegetables only from French producers, meant imports of produce from other EU Member States would be blocked.

“Carrefour sees this as a means of supporting French farmers who have been hit by the Russian boycott, adverse weather conditions and low prices,” Huitema said, but he went on to ask, “if Carrefour is breaching EU competition rules with the measure and undermining free trade within the European Union.”

“What measures will the Commission take if it turns out that Carrefour has broken the rules and when will the Commission take action?” he also wrote.

Carrefour says “first of its kind” move aimed at helping French growers

In a November press release, Carrefour said  its agreement with France’s federation of vegetable producers to offer only France Origin seasonable vegetables was the “first of its kind” and “consistent with the group’s ongoing commitment to supporting farming and to working in close partnership with farmers. It will also apply to spring and summer vegetables.”

“Following the highly unusual weather conditions that 2014 has seen, together with the serious disruptions that have resulted from the sanctions imposed on Russia, Carrefour – in partnership with Légumes de France – has decided to support French producers of everyday vegetables and promote production in France of carrots, potatoes, onions, turnips, chicory, shallots, etc. while they are in season.”

“This commitment covers all of the group’s Carrefour hypermarkets and Carrefour Market supermarkets in France – a total of nearly 1200 stores. And so that customers know what exactly they’re buying, special signage will be used to identify all France Origin products,” Carrefour said.

Read more about the Carrefour Group on p26-27 of our latest edition, number 135.

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Call for EU to help fruit and veg farmers gain clout with retailers

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The European Commission needs to intensify its efforts to protect farmers from unfair trading practices by large retailers, according to a draft report to the European Parliament by the Committee on Agriculture and Rural Development rapporteur Nuno Melo.

“There seems to be little point in investing resources in strengthening and creating POs (producer organisations) – a slow and difficult process – if negotiating power in the food supply chain remains highly concentrated in retailers’ hands,” the draft report, dated January 29, says.

Because fruit and vegetables (F&V) are mostly perishable products that must be sold quickly, this leaves farmers in a structurally weak bargaining position vis-à-vis major retailers.

 

Need for improved crisis measures

And while market crises occur frequently in the F&V sector, since even small production surpluses can cause large falls in producer prices, “there seems to be a consensus that crisis prevention and management (CPM) instruments are not being sufficiently used.”

“This is a worrying a situation, given that market crises are a regular feature of F&V production, since even small increases in production, due to favourable weather conditions for instance, can cause large falls in prices.” The draft report therefore calls on the commission to consider making contributions to mutual funds eligible as CPM measures, to help farmers protect themselves against large drops in income.

 

Too much uncertainty and complexity

It also says that associations of producer organisations (AOPs) could play an important role in increasing the bargaining power of farmers and urges the commission to reinforce incentives for setting up APOs and to envisage a greater role for them in the future.

Reducing legal uncertainty and administrative burdens “should be a first step in making POs more attractive,” it says.

However, the report also stresses that the basic architecture of the EU fruit and vegetables regime should not be changed as part of the commission’s ‘simplification’ agenda and its upcoming review of the implementation of rules on producer organisations, operational funds and operational programmes in the fruit and vegetables sector since its 2007 reform.

 

Read the full draft report here.

 

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Commission admits too many fruit and vegetable producers not getting EU aid

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The European Union fruit and vegetable regime needs to be reviewed to ensure support for producer organisations, the European Commission has said in a report to the European Parliament and Council.

This is needed in order to achieve in all Member States the objectives of the EU farm policies set under the 2007 and 2020 reforms.

Since the 1996 reform, producer organisations (POs) have been the cornerstone of the EU regime for the fruit and vegetables (F&V) sector.

“The EU average of degree of European production within Producers’ Organisations has slightly improved +1,2% and reached 48,4%, but it is still far below the objectives established in 2007 of more than 70%.

Only a limited number of F&V producers are members of a PO. “Thus, most producers are excluded from the direct benefits of the EU regime for the F&V sector,” the Commission said in its report.”

“Moreover, despite progress made at the national level, in some Member States there are still significant regional imbalances in the degree of organisation of F&V producers. An example of that is Italy, where the relatively high national organisation rate (about 47%) is the result of the high organisation rate of some northern regions and the low organisation of several other regions.”

Later in the report, the commission said the “persistently low degree or lack of organisation in some MSs” is a crucial issue needing careful analysis with a view to identifying, where appropriate, additional measures to encourage not only a further rise in the degree of organisation of producers in the whole EU but also a decrease of the imbalance of F&V producers’ organisation within the EU.

“A low degree or lack of organisation also means that most F&V producers do not belong to a PO, so they do not directly benefit from specific EU aid for the sector,” it said.

“Those producers, frequently the smallest, cannot even benefit from the services that POs could provide, have very weak bargaining power within the supply chain and are more exposed to the risks linked to market globalisation and climate change.”

Increasing the rate of organisation of the F&V sector remains crucial especially in Member States where the organisation is still very low. In this respect, there is also the need to explore measures to stimulate forms of cooperation to help PO’s and non-organised producers to better deal with those challenges.

To address such shortcomings, the current EU F&V regime needs to be reviewed and the Commission could build upon the results of the report and upcoming debate to later present legislative proposals “to revise the Union aid scheme for the fruit and vegetables sector.”

Read the report here.

Follow progress here.

 

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Eurostat reports 2014 price drops for EU-grown fruit, vegetables

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The value of fresh vegetable production has fallen 6.5% and that of fruit 10.7% in the EU this year, according to estimates from Eurostat.

This was despite production volumes rising nearly 2% and 0.4% respectively in 2014 compared to 2013, it said in a news release. For potatoes, it said prices were down 24.5% but volumes up 5.5%.

Meanwhile, the value of EU28 agricultural crop production overall is down 6% on last year, “due to a significant decrease in prices (-9.5%), partly counterbalanced by an increase in volume (+3.8%),” the EU’s statistical office said.

On the inputs side, costs have decreased in real terms – by 6.4% for fertilisers and soil improvers, and almost 4% for energy and lubricants.

Farm worker incomes down 1.7%

Over 2005–2014, real agricultural income per worker in the EU climbed 34.4%, while agricultural labour input fell by 24.6%. Compared with 2005, the per worker income has risen in 19 EU states, remained almost stable in 3, and fallen in Luxembourg, Malta, Ireland, Finland, Croatia and Belgium.

However, relative to last year, real agricultural income per worker slipped 1.7% this year. The biggest drops were in Finland (-22.8%), Lithuania (-19.4%), Belgium (-15.2%), Italy (-11.0%), Estonia (-10.9%) and Denmark (-10.1%), and the highest increases in Slovenia (+13.3%), Hungary (+9.1%), the Czech Republic (+7.2%) and the UK (+6.9%). Greece, Cyprus, France and Germany (only just) were the only other states to see growth this year.

The estimates are based on data supplied by national authorities in the EU28 member states, Eurostat said.

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Read the release here.
 
 
 
 
 
 
 
 
 
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More European Commission help for states most harmed by Russian veto

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Amid tumbling prices, the European Commission has promised further aid for member states most affected by the Russian ban blocking imports of certain EU products.

Its additional emergency measures for perishable fruit and vegetables will run until the end of next June. However, its total spending under existing such measure and the new scheme will remain below the €165 million it initially set as the maximum expenditure.

Based on historic export volumes to Russia in the last three years, it says it will now set new eligible volumes for the withdrawn from the market of certain fruit and vegetables for 12 member states.

EU agricultural commissioner Phil Hogan acknowledged that while the current exceptional support programme – which expire on December 31 – eased pressure on fruit and vegetable growers following the Russian ban, “a downward pressure on prices persists for some products in some regions of the EU.”

In a press release, the commission said the new scheme will apply to the 12 member states “which exported most fruit and vegetables to Russia on average during the January-May period (April to May for certain fruit where the January to March period was already covered by the previous measure) during the last three years.”

Before the ban, Spain’s fruit and vegetable sector alone sold “goods worth approximately EUR 225 million to Russia,” according to Spanish member of the European Parliament Esteban González Pons (PPE).

For more information on the EU measures:  “Market support for perishable fruit & vegetable to continue in 2015”

 

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Organic vegetables in the EU

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European Commission preparing action plan to stimulate organic agriculture

Unprecedented growth has taken place in the EU organic market in the last decade and it now attracts annual turnover of about €20 billion. (DE: 6.6; FR: 3.8; UK: 1.9; IT: 1.7).

Nevertheless, vegetables represent a small part only – just 1.2% – of the EU’s organic crop area, with 110,955 ha out of a total 9.6 million ha in 2011.

Italy is the Member State with by far the largest area of organic vegetables (23,405 ha), followed by Germany with more than 18,000 ha, then France with 14,529 ha. The United Kingdom boasts 13,618 ha and Spain 11,483 ha.

 

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13.6% of organic citrus crops in Italy, just 1.8% in Spain

Organic fruit crops cover 264,000 ha and account for just over a fifth of the main permanent organic crops with the biggest ones being olives and grapes.

The organic citrus sector has seen dynamic growth in the last 15 years in the EU though it is concentrated around just a few Member States: Italy, Greece, Spain and Cyprus.

The biggest citrus areas are in Italy (more than 21,900 ha) and Spain (around 5,856 ha in 2011 but increasing). Organic citrus represented 5.3% of the total citrus area in 2011 for the above-mentioned countries. In 2011, 13.6% of the total citrus area in Italy was organic compared to just 1.8 in Spain, the EU’s biggest citrus grower.

 

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Market has quadrupled but control inadequate

Although the market has quadrupled in the last decade, EU production has not kept pace and the extra demand is met by imports.

There are also societal and consumer concerns not yet fully addressed, such as the sustainable use of energy and management of environmental impacts, animal welfare and pesticide residues.

Other issues include the myriad logos and shortcomings in the control system, such as with insufficient import inspection. Also, the production rules have been watered down and the risk of loss of consumer confidence is high.

New EU plan

As a result, the European Commission has now set three priorities:

– to increase competitiveness;

– to maintain and increase consumer confidence;

– to reinforce the external dimension of EU organic farming.

It allocated nearly €85 million for organic production under the 2014-2020 CAP budget.

Needed: centralised database, frauds made public

A centralised database for import certificates should be created. Documentary evidence could be a solution and exchange between the control actors should be increased. Fraudulent certificates should be published, a practice the U.S. Department of Agriculture already follows. Transparency could also be increased by using the name of the control body on labels instead of a code number and requiring accreditors to be trained at EU level.

More money is needed for promotion funds to attract consumers not currently buying organic products. The organic sector has done well so far but from now on the whole chain, from producer to retailer, needs to go a step further. More companies have to get involved and particularly big ones that can invest in research and development.

 

LH

 

Read full report available free here on page 38 of issue 33 of Eurofresh Distribution magazine

Photo of ecologically grown vegetables by Elina Mark (via Wikimedia Commons)