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November 1996
U.S. exports of horticultural products to all countries in August reached $718 million, up 1 percent or $10.1 million from the same month a year earlier. Seven out of 15 categories of horticultural exports registered increases. Categories with the most significant increases in August were non-citrus fresh fruit (up $18.8 million or 16 percent); wine (up $8.8 million or 46 percent); canned vegetables (up $6.6 million or 14 percent); and dehydrated vegetables (up $5.5 million or 32 percent). The categories with the most significant decreases were tree nuts (down $9.1 million or 9 percent); fresh citrus (down $5.8 million or 18 percent); and miscellaneous products (down $10.8 million or 7 percent). During the first 11 months (October-August) of fiscal year 1996, the total value of U.S. horticultural exports was $8.57 billion -- 2 percent above the same time period last year.
EXPORT NEWS AND OPPORTUNITIES
U.S. grapefruit exports increased for the 4th year straight in 1995/96
Marketing year 1995/96 (September-August) marks the 4th year in a row that the value and volume of U.S. grapefruit exports have increased. U.S. grapefruit exports in 1995/96 were valued at $260 million, the second highest on record, and 8 percent above the previous season's value. Japan and the European Union accounted for the bulk of the value increase. The 1995/96 export value is slightly below the 1990/91 record of $270 million, when per unit prices were exceptionally high due to the December 1989 freeze in Florida. The volume of U.S. grapefruit exports in 1995/96 also reached a near record 500,000 tons, 3 percent above last year's shipments. European Union countries accounted for the bulk of the increase in volume.
Relatively low grapefruit prices, good quality U.S. fruit, and ongoing Market Access Program (MAP) activities were the major reasons for the success in U.S. exports. U.S. sales to Japan of $145 million, the largest single destination, benefited from retailers' U.S. grapefruit promotions, early harvest of Japan's domestic citrus crop, and expanded sales to cities outside Tokyo. Sales to the European Union were up sharply, mainly due to price.
Florida accounts for approximately 85 percent of total U.S. grapefruit exports. Nearly three-fifths of Florida's fresh market grapefruit was exported in 1995/96. This percentage of fresh market exports has been increasing. Continued strong grapefruit export sales are especially good news for Florida producers, coming at a time when domestic demand is down and production is increasing. Other major producing states -- California, Arizona and Texas -- also export grapefruit in increasing quantities. In each of these states, producer groups benefit from the Market Access Program.
GSM-102 Credit Guarantee Program: FY 1997 kicks off in October; horticultural products included in allocations to 14 countries totaling almost $1.2 billion
At the start of the new fiscal year on October 1, 1996, over 50 horticultural products are included in General Sales Manager allocations totaling $1.196 billion to 14 countries. As with last year, commodity specific allocations are not being announced. Rather, allocations are made on a "commodity basket" approach, i.e., one country allocation under which are listed several commodities and products that may be registered on a first-come, first-serve basis. This structure provides more flexibility to exporters in registering different sizes of shipments under the program. Credit amounts are allocated to countries for a variety of products on a first come first serve basis. As always, the GSM is open to amending the program to include products not mentioned in each announcement should importers or exporters indicate a reasonable demand for GSM credit. Table 1 lists registrations in FY 1997 through October 11 for various horticultural commodities and products. Through this program, the U.S. exporter can be paid by the U.S. bank immediately upon export if an irrevocable letter of credit is opened by the importer's bank and financed by the U.S. bank. The importer's bank then has up to 3 years to repay the U.S. bank. The following table presents FY 1997 allocations by country by product. Repayment terms vary under the program, from the standard 3-year to 90-day terms. Cautionary information for use of the accompanying table: The table reflects only exporter applications for guarantees that have been entered into the GSM 102 computerized system. At any given time, exporter applications are in process, and not all of those received have been entered into the system. Moreover, all applications are initially entered into the system on a provisional basis until price reviews have been completed, the guarantee fee has been received, and the written guarantee has been issued. Thus, some applications now in the system may in the future be removed, and the commodity balances correspondingly increased. For details on terms and authorizations, see the footnotes to the table. Note: applications to include other horticultural commodities and products in GSM-102 programs will be considered by FAS. (For further information on the GSM-102 program for horticultural commodities, contact Robert Knapp, 202-720-4620.)
Hong Kong: Another promising Asian market for U.S. beer exports
U.S. beer exports continue to do well in rapidly growing Asian markets. Rising incomes, policy changes, and internationally-minded young people are fast making Hong Kong one of the best prospects for beer exports. U.S. beer exports to Hong Kong have been steadily rising since 1992, increasing 62 percent from 1994 to 1995 (calendar year) to a value of nearly $45 million. In the first 7 months of 1996, U.S. beer exports were up almost 5 percent above the previous year.
Several important factors have contributed to the recent rise of beer consumption in Hong Kong. First, beer consumption in general has been increasing in the 1990's. Total market demand was estimated at 170 million liters in 1994, up from 160 million in the previous year. Part of this growth is reportedly related to the trend of drinking lower priced alcoholic drinks. In addition, the 20-35 age group is interested in beers with a high-quality brand image. As a result, most of the growth and interest has been in premium beers, whose sales have more than doubled since 1992. Sales of premium beers will likely reach 50 million liters by 1997, up from 43 million liters in 1995. An increasing number of these sales have moved from the retail sector to consumption in bars and restaurants.
A recent duty rate revision has helped make imports more attractive. Domestic beers used to dominate the market, but by 1994, imports totaled 54 percent of the volume consumed. The U.S. continues to dominate the import market in volume terms, capturing 48 percent of the import market in 1994. However, the Netherlands exports more in terms of value with its sales of Heineken. Given these trends, U.S. export opportunities should continue to be good, as American products generally have a good reputation in Hong Kong. Growth could be aided by increasing the number of American brands available in Hong Kong, especially in the premium segment for upscale consumers and the low priced segment where the leading brand's market share, San Miguel, has dramatically shrunk. Multi-packs of beer may also provide some opportunities because new supermarket delivery services makes these type of sales more practical for local consumers.
Potential market opportunity for U.S. "fresh green" asparagus in France
According to the U.S. Agricultural Counselor in Paris, U.S. fresh green asparagus of superior quality marketed in France during the off-season could possibly find a niche in the French market, provided that prices are competitive. However, the French consumer needs to be educated to the overall health value of U.S. fresh green asparagus. The principal marketing season for asparagus imports into France from EU countries, mainly Spain, runs from March to June.
Import policy
The customs duty on fresh asparagus imported into France is 14.1 percent ad valorem. As far as regulations are concerned, there are no restrictions on importing fresh asparagus into France. However, fresh asparagus, as well as some other fresh vegetables, are subject to EU quality norms, which mandate a quality inspection at the border of entry to the European territory to receive customs clearance.
Wholesale prices
The following are average wholesale price quotations for green and white asparagus at the Rungis wholesale market in Paris during the month of June 1996:
White asparagus:
Category I, Size+16..... FF 17.00 per kilogram
Category I, Size+22.....FF 22.79 per kilogram
White/Violet asparagus:
Category I, Size+12/16...FF 7.83 per kilogram
Category I, Size+16......FF 11.73 per kilogram
Category I, Size+16.......FF16.33 per kilogram
Category II, Size+22......FF8.91 per kilogram
Green asparagus............FF28.00 per kilogram
Note: Approximately French Franc 500 is equivalent to $99 dollars U.S.
Further details concerning French prices can be obtaining by contacting the French Ministry of Agriculture at the following address:
Ms. KlipfelTrade
French imports of fresh asparagus during calendar year 1995 totaled 9,534 tons valued 128 million Francs. The major French suppliers from the EU countries included Spain, Greece and Italy, with Peru and Morocco accounting for most of the balance from third countries. The U.S. share of total imports during the same period accounted for only about 1 percent in volume and 1.6 percent in value. In 1985, French imports of fresh asparagus totaled only about 635 tons. However, because of imports, French consumption of fresh asparagus have averaged about 0.6 kilograms per capita over the past several years.
Exports generated by the U.S. grape industry
The U.S. grape industry generated exports of $817 million in 1995/96. Wine and table grapes each accounted for 34% of total export value ($280 million for wine, $278 million for table grapes); raisins for 24 percent ($199 million); and grape juice for 7 percent ($60 million).
U.S. table grape export value reached a record $278 million in marketing year 1995/96 (May-April), up 10 percent from a year ago and 26 percent above five years ago. Grape export volume also set a record of 226,892 metric tons, up 5 percent from last season. Exports were up to Canada, the largest market, although not at a record level. Hong Kong, the second largest market, accounted for about 60 percent of the increase in U.S. shipments. Other countries registering record increases were Malaysia, the Philippines, which became fourth largest market, and Indonesia. Mexico fell from the third largest market in 1994/95 to the fifth largest in 1995/96.
U.S. wine and wine product exports climbed to a record $280 million during marketing year 1995/96 (August-July), their twelfth consecutive record-breaking season and a 33 percent gain over the preceding year. U.S. wine exports also set a volume record of 1.6 million hectoliters, 18 percent above both the previous season's volume and the previous record set in 1992/93. Increased exports were registered during 1995/96 to Canada (up 19 percent), the United Kingdom (up 35 percent), and Japan (up 15 percent). More varieties of higher quality U.S. wine, robust foreign demand, favorable exchange rates, and market promotion efforts under USDA's Market Access Program combined to boost exports in 1995/96.
Although lower in volume terms (down 1 percent), the value of U.S. raisin exports in 1995/96 (August-July) reached a record $199 million, up 3 percent from 1994/95. Major markets for U.S. raisins in 1995/96 continued to be the United Kingdom (down 1 percent), Japan (up 2 percent), and Canada (down 5 percent). Dramatic increases in exports were registered during 1995/96 in other leading markets such as Germany (up 13 percent), Denmark (up 7 percent), and Hong Kong (up 20 percent).
U.S. grape juice exports in calendar year 1995 totaled 19 million gallons, valued at $60 million, both a record. Main U.S. markets were Canada ($24 million), Japan ($19 million), and Korea ($7 million). These markets accounted for more than three quarters of the total value of U.S. grape juice exports in 1995. Increased international demand, combined with good quality product, boosted U.S. grape juice sales to these markets.
U.S. and Mexico finalize accord on tomato prices
The Department of Commerce announced October 28 that it had finalized an agreement with Mexican tomato growers to settle the antidumping investigation. The suspension agreement provides that Mexican tomato growers will not sell in the United States at less than a reference price based on the lowest average Mexican import prices for a recent period when there was no price suppression. Just prior to signing the suspension agreement, Commerce issued a preliminary determination of dumping, as required by law, finding a dumping rate of 17.56 percent for most Mexican growers. Because the agreement has been signed, the preliminary determination will not go into effect, and no dumping duties will be assessed as long as the agreement remains in effect. The reference price can be adjusted after one year if market conditions change significantly.
The agreement provides the mechanism by which normal values and reference prices are determined, and the manner in which these will be used to ensure compliance. The suspension agreement stems from an antidumping investigation initiated last April in response to a petition filed by Florida tomato growers. In 1995, U.S. imports of Mexican tomatoes increased nearly 60 percent from 1994. Florida tomato plantings for the upcoming 1996/97 season are reported to have declined significantly due to difficulty in obtaining financing brought on by uncertainty over Mexican import competition.
Colombia lifts fumigation requirement on fruits and vegetables from California and Florida
Colombia's plant quarantine agency, ICA, announced on October 17 that it was removing, effective immediately, its requirement that fruits and vegetables originating in the states of California and Florida be fumigated with methyl bromide before export. Other states, including Washington and Oregon, remain eligible to export without fumigation with methyl bromide. This requirement for California and Florida had represented a serious obstacle for exporters, since the fumigation process can significantly degrade fruit and vegetable quality and shorten shelf life. Colombia had established the requirement in response to concerns over oriental fruit fly detections in California and the issue of Caribbean fruit fly in Florida. To resolve the issue, which arose in January 1996, the Emerging Market Office's Technical Issue Resolution Fund was used to finance a visit by two ICA inspectors to California and Florida this past August to observe the pest detection and control systems in those two states. This visit was critical to the successful resolution of the issue. For the 12-month period ending August 1996, U.S. fruit and vegetable exports to Colombia were valued at $7.3 million.
Apple production in selected Northern Hemisphere countries in marketing year 1996/97 (July/June) is forecast at a record 37.0 million tons, 7 percent above last year's output. Increased production in China, Italy, Germany, and Poland is expected to offset a smaller overall apple crop in the United States, as well as in Belgium-Luxembourg and the Netherlands. Northern Hemisphere apple exports in 1996/97 are forecast at 3.2 million tons, down 3 percent from 1995/96 shipments. Smaller crops in most EU countries have reduced EU export prospects in 1996/97. U.S. apple exports in 1996/97, however, are forecast to increase 14 percent to 640,000 tons. Larger exportable supplies from northwestern states have improved overall U.S. exports prospects. Also, the United States has reached several technical agreements this year, which are expected to result in improved access to important markets.
Northern Hemisphere apple production is forecast to increase 7 percent due to larger crops in China, Poland, Italy, and Germany
The major apple producing countries in the Northern Hemisphere are expected to harvest a record 37.0 million tons in 1996/97, 7 percent above last season's revised output of 34.7 million tons. Increased production is expected in major apple producing countries such as China, Italy, Germany, and Poland. These increases are expected to more than offset smaller apple crops in the United States and France. China, the world's leading apple producer, accounts for about 40 percent of Northern Hemisphere apple output. In comparison, the United States and selected European Union (EU) countries combined account for another 35 percent.
U.S. apple production in 1996/97 is forecast down 1 percent from last year, to 4.81 million tons. Production in the western states is forecast up, particularly in the states of Washington and California, where favorable weather resulted in a 12-percent increase in both states, to 2.54 million and 430,920 tons, respectively. Output in the central states, (with Michigan down 41 percent, to 328,860 tons), is forecast down as a result of poor pollination, spotty fruit set, heavy rains, hard freezes, and hail damage across much of the central region.
Production is expected to be below last year's output in 14 out of 16 eastern states because of excessive moisture in several areas and late-season freezes and hail storms in the southeast.
Apple production in China in 1996/97, which accounts for about 30 percent of China's total fruit output, is forecast to increase 14 percent to 16.0 million tons. This sharp increase in China's fruit output reflects the central government's strong support for rural development, coupled with farmers' enthusiasm for fruit production such as apples. Government fruit production incentives, like those in Shandong Province, include payments to farmers for shifting away from traditional variety apple trees and planting higher-yielding Fuji varieties.
All EU countries, except Germany and Italy, are forecast to have reduced output in 1996/97. Apple production in France, the leading EU producer, is forecast to decrease for the third consecutive year. Unfavorable weather conditions in the spring of 1996 in the southern and southwest regions of France will likely hamper production of all major apple varieties. These regions account for 85 percent of France's total apple crop. Belgium-Luxembourg accounts for the largest decline in 1996/97, with production forecast down 46 percent to 277,400 tons. Adverse weather, including a long, unseasonably cold winter and a cold spring, resulted in a weak bloom and poor pollination. On the other hand, larger apple crops are forecast in Germany and Italy, the second and third major producers in the European Union. German apple production in 1996/97 is forecast at 1.7 million tons or 25 percent above the 1995/96 output, due mainly to an on-year in the bearing cycle. In Italy, favorable weather conditions offset a decline in planted area in some major apple producing regions. Consequently, Italy's 1996/97 apple crop is forecast to increase 4 percent to 2.0 million tons.
Larger apple crops in 1996/97 are also forecast in leading Eastern European countries. Production in Poland and Russia will benefit from favorable weather, a cyclical high yield season, and increased use of production inputs. In Hungary, apple production in 1996/97 is forecast to recuperate from the frost-damaged, record low crop in 1995/96. Unfavorable weather, low input use, and aging orchards, however, have adversely affected Hungary's apple production in recent years.
Japan's 1996/97 apple crop is forecast at 936,200 tons, down 3 percent from last season. The continued decline in Japan's apple production reflects both the transition in production to new varieties and the general contraction of Japanese agriculture.
Exports of apples from the Northern Hemisphere are forecast to decrease due to output shortfalls in leading EU's exporting countries
Total Northern Hemisphere apple exports in 1996/97 are forecast at 3.2 million tons, down 3 percent from last season's shipments. Smaller crops in most EU countries, specially those in France and Belgium-Luxembourg, have decreased overall EU export prospects in 1996/97. U.S. apple exports, however, are forecast to increase 14 percent in 1996/97 to 640,000 tons. Larger exportable supplies from northwestern states have improved overall U.S. export prospects in 1996/97. Also, the United States has reached several technical agreements this year which is expected to result in increased access to important markets. The EU and the United States account for more than 80 percent of annual Northern Hemisphere apple exports. Apple shipments from Poland and China are also forecast to increase in 1996/97.
A smaller crop and, consequently, higher prices reduced U.S. apple exports in 1995/96
Apple exports from the United States in 1995/96 (valued at $367 million) totaled 562,555 tons, 19 percent below the record 1994/95 shipments. A smaller crop in Washington state and strong domestic demand hampered total U.S. apple exports in 1995/96.
Asia continues to lead the U.S. export performance with 6 of the 10 top markets for apples. Canada, Mexico, the United Kingdom, and Brazil comprise the other top markets. Exports to Taiwan in 1995/96, the largest export market, were down 12 percent. Overall, U.S. apple shipments to top markets decreased in 1995/96, except to Indonesia where exports were up 14 percent. Indonesia has become an important market for U.S. fruit in recent years.
The United States has reached several technical agreements, which will result in continued access to important markets
In 1996 the United States has resolved a number of technical issues and quarantine measures, which will translate into continued access to important markets such as Brazil, Taiwan, and Colombia. Meetings between USDA officials and their Brazilian counterparts, held the week of July 15 in Brazil, resulted in agreements for the entry of apples into Brazil from all U.S. origins. In September, Taiwanese authorities and USDA representatives met for another round of technical trade talks, at which time the existing understanding on Taiwan's codling moth regulation was confirmed for the 1996/97 shipping season. On October 17, Colombia lifted its fumigation requirement for fruit and vegetables originating from the states of California and Florida. Market promotion efforts under the Market Access Program (MAP) will continue to assist in developing U.S. exports to these countries.
Recent developments in some U.S. markets are also expected to yield positive results for U.S. apple exports this season. In September, for example, the Government of Guatemala established a tariff rate quota of 5,000 tons for apple imports, far surpassing its previous World Trade Organization (WTO) commitment of 157 tons. The new policy also eliminates Guatemala's import licensing requirement for apples and allows for imports year round. As the primary supplier of imported apples, the United States is expected to benefit most from the new Guatemalan policy.
Lower production in the EU in 1996/97 will likely increase import demand
Import demand for fresh apples in the EU is expected to rise in 1996/97. U.S. apple exports to the EU in 1995/96 totaled 35,479 tons, valued at $21 million, down 33 percent and 19 percent, respectively, from 1994/95. The degree that U.S. apple exporters benefit this season will depend on successful marketing techniques and import regulations, such as the system of duty calculation and the new import licensing system.
Under the system of duty calculation, ad valorem import duties are assessed in one of three ways: 1) the importer can declare that the shipment is consistent with calculated, origin-specific standard import values (SIV), which are set by the EU Commission on a daily basis; 2) the importer could declare the actual CIF transaction value; or 3) a provision could be made for product brought in on consignment, with documentation and deposits.
Since its implementation in July 1995, U.S. exporters have raised concern over the EU customs valuation system. The EU's daily calculation of the SIV creates uncertainty for U.S. fruit and vegetable exporters, making it difficult to negotiate prices with EU importers. Moreover, many exporters disagree with the way the EU calculates the SIVs, saying that the method is not transparent.
In July 1996, the EU Management Committee for Fruits and Vegetables adopted a regulation imposing an import license requirement for eight products including apples, pears, table grapes, lemons, oranges, clementines/mandarins, and tomatoes. The licenses are suppose to be automatic, issued upon request, and valid for 30 days. A deposit of 15 ECU per metric ton of product must be made to obtain a license. Importers will reportedly be free to make a one time change in the origin of the fruit covered by the license. The stated justification for the licensing measure is to enable the EU to better monitor import volumes. The EU is reported to be within its GATT rights to impose an automatic import licensing regime for sensitive agricultural commodities, as long as the regime does not discriminate against imported product or distort trade.
The United States believes that the import licensing scheme will discourage trade by placing administrative burdens and costs on the trade. The new licensing requirements are generally considered to be unnecessary from both an import monitoring standpoint and a market stabilization standpoint, especially given the current entry price system with its extensive surveys of imports and the restrictions it already imposes on trade.
U.S. growth in the Japanese market will depend on effective marketing and Japan's cooperation to relax strict inspection requirements
U.S. apple exports to Japan in 1995/96 totaled 1,403 tons, down almost 90 percent from shipments in 1994/95. U.S. exporters have faced numerous obstacles to establishing a strong export program to Japan. Access to the Japanese market remains constrained due to a costly and stringent inspection process that requires, among other things, a tree-by-tree pest inspection. A narrower-than-expected price gap with Japanese apples has reduced trade and retail interest in U.S. varieties. Additionally, Japanese officials have approved imports of only Red and Golden Delicious apples originating in Washington state and Oregon, thus excluding other apple varieties and other states.
Nonetheless, the outlook for U.S. apples in Japan remains favorable. To achieve the potential for U.S. apple exports to Japan, however, it will be critical for U.S. suppliers to consider the price and quality of their apples, and to anticipate potential Japanese concerns over chemical residues. The USDA has continued to push for modifications to the existing apple export agreement that limits program participation to only qualified production areas of Golden and Red Delicious apples in the states of Washington and Oregon. The continued cooperation of the USDA, industry, and Japanese authorities will be indispensable to expanding access to other apple-producing areas of the United States as well as the addition of other apple varieties.
Forecasts for Southern Hemisphere countries
It is still too early to make reliable forecasts for Southern Hemisphere countries in 1996/97. Forecasts will be available in the March 1997 issue of World Horticultural Trade & U.S. Export Opportunities.
(For further information on supply, distribution, and trade, contact Samuel Rosa at 202-720-6086. For information on production, contact Kelly Strzelecki at 202-720-6791.)Pear production in the Northern Hemisphere in 1996/97 is forecast at 4.7 million tons, 2 percent above last year, based on a larger harvest in the European Union. Northern Hemisphere pear exports in 1996/97 are forecast at about 725,000 tons, slightly below last season's shipments. A smaller harvest in the United States of Anjous, the principal U.S. export variety, and lower exportable supplies in some EU countries have decreased 1996/97 Northern Hemisphere export prospects. The European Union and the United States combined normally account for more than 90 percent of Northern Hemisphere pear exports. U.S. pear exports in 1996/97 are forecast at 135,000 tons, down 6 percent from the last season's record, based on the smaller pear crop forecast. U.S. pear exports in 1995/96 reached a record 143,000 tons. Brazil accounted for most of the increase in U.S. sales and emerged as a key market.
Pear production in the Northern Hemisphere in 1996/97 is forecast at 4.7 million tons, 2 percent above last season's output primarily due to a larger EU harvest
Pear production in selected countries of the Northern Hemisphere in 1996/97 is forecast to increase 2 percent as larger crops throughout most of Europe are expected to make up for the short crop in the United States. The United States is the world's largest pear producer.
The U.S. pear crop for 1996/97 is forecast at 710,700 tons, down 17 percent from 1995/96. The downturn in production is the result of unusually cold weather in February in Washington and Oregon, and cool spring weather elsewhere, which adversely affected fruit sizes. Bartlett pear production in California, Oregon, and Washington is forecast at 371,950 tons, off 18 percent from a year ago. Substantial declines in Oregon and Washington of 36 and 47 percent, respectively, were partially offset by a 9-percent increase in California where the 1996/97 crop is estimated at 244,940 tons. Production of pears other than Bartlett in these three main-producing states is forecast down 18 percent overall, with the crop in Washington State estimated at 158,760 tons, a 27-percent reduction from last season.
Production of pears in the European Union is forecast to increase 8 percent in 1996/97 to 2.8 million tons. The 1996/97 pear harvest in Italy, the EU's main producer, is forecast at 1.0 million tons, up 8 percent from 1995/96, due to favorable weather conditions. Likewise, Spain's pear crop, the second largest in the EU, is forecast to increase 24 percent in 1996/97 to 584,300 tons.
Japan's 1996/97 pear crop is forecast at 429,400 tons, up 7 percent from last season, because of favorable weather. Japan's production of Nashi pears (Japanese sand pears) comprises over 95 percent of the annual crop. The volume of Western-style pears produced in Japan is small, approximately 21,000 tons, but output is expanding gradually.
Turkey's production of pears has remained stable for the past few years at 410,000 tons. There is the potential for moderate expansion in Turkey because, out of 14.3 million trees, 2.5 million trees have not reached the bearing stage.
Exports of pears from the Northern Hemisphere are forecast down 5 percent in 1996/97
Northern Hemisphere pear exports in 1996/97 are forecast at 645,000 tons, down 5 percent from last season. Lower supplies in leading EU exporting countries, mainly Belgium-Luxembourg and the Netherlands, and reduced output in the United States of Anjou's, the principal U.S. export variety, are expected to hamper overall pear shipments from the Northern Hemisphere in 1996/97. Exports from the EU (including intra-trade) are forecast to fall 6 percent to 568,695 tons, while U.S. exports are also forecast to fall 6 percent to 135,000 tons. The European Union and the United States combined normally account for more than 90 percent of Northern Hemisphere pear exports.
U.S. pear exports set a record in 1995/96
U.S. pear exports in marketing year 1995/96 reached a record 143,313 tons, valued at $82.6 million (14 percent above the previous season's value). Expanded sales to Canada and Brazil more than offset lower shipments to Mexico. Sales to Canada, the largest U.S. market, expanded from $27.4 million in 1994/95 to $31.6 million in 1995/96 due to higher per unit prices. Sales to Mexico, the second largest market, fell from $22.1 million in 1994/95 to $14.4 million in 1995/96 as imports in the first half of the marketing year were adversely affected by the December 1994 peso devaluation. Sales to Brazil, the third largest U.S. market, more than doubled from $4.0 million in 1994/95 to $9.5 million in 1995/96.
Brazil has emerged as a key market for U.S. pears in the last 2 seasons. Moreover, MAP promotion dollars played a pivotal roll in the expanded sales to Brazil in the 1995/96 season. Although limited industry funds had been previously used for promotion in Brazil, FY 96 represented the first significant promotion budget for U.S. pears in Brazil. About $50,000 in MAP funds were matched by $90,000 in industry funds. This budget allowed for in-store promotions to be held for the first time in Brazilian supermarkets. Also, Brazil's phytosanitary import requirements for pears has been favorably resolved. The resulting agreement will help to ensure continued, uninterrupted access to this important new market. Trade sources believe Brazil has the potential to become number 2 or perhaps the top U.S. pear market.
Pear exports to both Canada and Taiwan continued growing during 1995/96. Exports to Canada reached 44,348 tons valued at $32 million. Growth in Canadian imports reflect the rise in consumption of fresh pears, as the eating habits of new immigrants tend to favor this fruit. The major U.S. competitors in Canada are Chile, Argentina, and South Africa. Taiwan has also been a consistent growth market as well as being the 4th-leading market for U.S. pears. Exports in 1995/96 totaled 11,438 tons valued at $5 million, up 33 percent and 29 percent, respectively.
It is still too early to make reliable forecasts for Southern Hemisphere countries in 1996/97. Forecasts will be available in the March 1997 issue of World Horticultural Trade & U.S. Export Opportunities.
(For further information on supply, distribution, and trade, contact Samuel Rosa at 202-720-6086. For information on production, contact Kelly Stzelecki at 202-720-6791.)The 1996/97 canned fruit pack in selected countries, excluding the United States, is forecast at 1.2 million metric tons, 3 percent above the previous season's output. Total supplies are forecast down 2 percent as stocks were drawn down sharply in 1995/96 to expand exports. Beginning selected country canned pear and peach stocks in 1996/97 are forecast down 30 and 26 percent respectively. The U.S. canned pear pack is forecast down 29 percent, due to severe freezing temperatures in the Yakima valley. These lower supplies combined with strong international demand should buoy international prices. Selected country exports in 1996/97 are forecast to increase by 1 percent to 923,774 tons. However,exports from Greece, the world's largest canned fruit exporter, are forecast to decrease by 9 percent to about 375,000 tons, due to reduced carry-in stocks and production. Spain is expected to offset a large part of the decrease in Greek exports. U. S. canned fruit exports in 1996/97 are forecast to approximate last season's level of 55,000 tons.
CANNED PEACHES
Total canned peach output in selected countries, excluding the United States, in 1996/97 is forecast at 777,757 tons, up about one percent from the previous season. Although production in Greece declined by 3 percent, output in all other countries increased enough to make up for the shortfall. Selected country canned peach exports for 1996/97 are forecast at 557,424 tons, down 2 percent from the previous year's record level of 565,800 tons. Demand for canned peaches is expected to remain strong keeping prices firm and further reducing stocks.
GREECE
Greece's production and stocks are reduced sharply
Greece dominates the EU canned peach industry. The peach pack constitutes two thirds of the EU pack and, not counting the U.S. pack, nearly 50 percent of the world's pack. Greek production of cling peaches continues to be too large to be absorbed by the industry. Consequently, a large portion will be diverted to the withdrawal collection pools. The quantities of peaches withdrawn during the past season are now believed to be close to 170,000 tons of which about 45,000 tons are believed to be clingstone. The withdrawal ceiling for the entire EU for 1995 was set at 304,600 tons and will be the same for the 1996 season.
Favorable weather contributed to a 65 percent increase in cling peach production. This year's harvest is estimated at 650,000 tons. While extremely large, this harvest is 9 percent below the record 1994 level of 713,000 tons. The overall fruit size this year is smaller than that of 1995 and the Fortuna and Everest varieties which normally provide the higher quality fruit were in short supply. A good portion of the 1995 crop was damaged by frosts occurring in March but a large amount was packed to take advantage of a short world supply. This year's pack is estimated at 365,000 tons down 3 percent from last year's level.
The minimum price to growers for 1996 is set at 27.301 ecu/kg ($15.44/lb) the same as for 1995 ($16.20/lb). The 1995 price however, was 14.5 percent over the 1994 level of 23.832 ecu/kg.($12.85/lb). The difference in dollar equivalent is due to exchange rate adjustments.
Exports of canned peaches to set record in 1995/96
Greek canned peach exports in 1995/96 are estimated at a record 390,000 tons, 10 percent above the previous year and 4 percent more than the quantity packed. This resulted in a 50 percent drawdown in stocks. Stocks in 1996/97 are expected to fall to an all time low of 20,536 tons.
As of September, about 90 percent of the 1995 canned peach production was sold and 80 percent shipped. Exports in 1996/97 are forecast to decrease nearly 8 percent, due in part to expected lower supplies.
Domestic consumption of canned fruit including canned peaches, continues to be low, with over 97 percent of the pack being exported.
SPAIN
Spain's 1996/97 peach crop is forecast at 824,000 tons, up 25 percent from last year's output. The canned pack is estimated at 127,000 tons, up 7 percent from last year's level but well below the record 1992/93 pack.
The large peach crop and canned pack is expected to lower domestic prices somewhat and to contribute toward increased exports. Exports declined 46 percent last year due to reduced supplies. This year however, shipments are forecast to recover due to the larger pack.
The official price to be paid by the industry for new peaches is 28 pesetas/kg compared to 46.46 pesetas paid last year. However the trade is offering 25 pesetas/kg which is lower than the withdrawal price. Consequently few contracts are being signed. Last year canners paid 65 pesetas/kg.
ITALY
Canned fruit industry restructures
The Italian canned fruit industry is restructuring to adapt itself to the present market situation. The industry is becoming smaller. As domestic consumption declines the industry is becoming more export oriented and efficient to compete with Greek canned peaches, South African and Australia canned pears and fruit cocktail.
Peach production reverses three-year decline
In 1995/96 the Italian canned peach pack decreased for the third year in a row. The 1996/97 pack though is estimated at 40,000 tons, up only 8 percent from last year's low.
Domestic consumption has declined steadily since 1992/93. Consumption is, estimated at 21,000 tons, only 40 percent of the 1991 level. Despite the gloom in the industry, exports in 1995/96 reached 39,000 tons, off only 3,000 tons from the previous year. Exports for 1996/97 are expected to be about the same as last year.
FRANCE
Peaches are the leading canned fruit produced in France. However, production has declined steadily since 1992/93 and is estimated at 17,000 tons in 1996/96, down 3 percent from the previous year and 47 percent since 1992/93.
France is a net importer of canned peaches
As a result of the EU's duty structure, France procures most of its imported supplies from neighboring member states. Greece, Spain, and Italy account for 90 percent of France's estimated 26,743 tons of canned peach imports in 1995/96.Imports in 1996/97 are forecast at 29,000 tons.
SOUTH AFRICA
Canned peaches represent the largest sector of the South African canned fruit industry. The intake of peaches for processing increased by 5 percent to 116,187 tons in 1995/96, but the cannery yield was low and the actual pack decreased.
South Africa's production of canned peaches in the 1995/96 is estimated at 85,485 tons, down 5 percent from previous year's large out-turn of 89,566 tons. South Africa exported 70 percent of last year's pack. Most of the export market is served by two canners.
In accordance with the WTO agreement South Africa is scheduled to phase out the General Export Incentive Scheme (GEIS) by the end of 1997. With EU duty rates at 24 percent and without a WTO friendly system to replace the GEIS, the canning industry will be challenged to remain competitive in world markets.
AUSTRALIA
Australia's canned peach production for the last three years has remained relatively constant, fluctuating only 400 tons between 1993 and 1995. However, the 1996/97 pack is estimated at 34,000 tons, up 4 percent from the previous year.
Canned peach deliveries have strengthened during the 1995 season due to good mid to late season crops which more than compensate for the poor start of the season. The increase in the number of bearing trees of new peach varieties should see future Australian peach production increase. Most of these new varieties are aimed at the fresh market due to more favorable returns.
Canned peaches account for about 35 percent of Australian's canned fruit market which is valued at A$122 million. Production is dominated by two canners, Ardomona and SPC, which account for about 85 percent of the market.
Exports in 1995/96 totaled 12,500 tons, and for 1996/97 are estimated at 13,000 tons. Exports appear to have stabilized in the last three to four years following a steep decline starting in 1988 when exports totaled 28,000 tons. Tough competition from Greece, in important markets such as Japan and Canada continues to plague Australia's efforts to reestablish a vibrant export market.
Australia's Anti-dumping Authority imposed sanctions on imports from China and Greece. The Authority concluded that imports of canned peaches from China and Greece had been sold at prices below the normal value in their respective markets. Countervailing duties of A$2.38 and A$4.54 per basic carton (24 kg gross) were imposed on shipments of canned peaches from Greece and Spain. Anti-dumping duties were placed on product from Greece and China. The anti-dumping levies applied are not available due to commercial confidentiality. The antidumping duties were originally imposed in January of 1992 for a three year period. However they were extended to five years, when another review will occur.
Most imports are destined for the lower-priced generic end of the market. However, the realization, by Australian canners, that market share was being eroded by lower cost imports led to the introduction of some locally packed generic lines. Imports of canned peaches decreased from Greece and Italy during 1995 and are expected to remain low during 1996. This reflects the Anti-dumping actions taken by Australia, and the Australian canners agreeing to the production of product for the generic market.
CHILE
Canned peach production in 1996/97 is forecast at a record 49,000 tons. Replanting of aging trees with improved higher yielding varieties continues to take place and is expected to increase production to 65,000 tons over the next 3-5 years.
Because of stagnant domestic demand, due to increased competition from alternative products, and declining profit margins, canned peaches are produced mainly for the more lucrative export market. There are now only 7 main canneries of which 5 account for over 90 percent of production.
Exports account for about 70 to 75 percent of the pack and have increased corresponding with production. Since 1990/91 production has increased 105 percent and exports have increased 117 percent.
Exports totaled 35,000 tons in 1995/96 and are forecast at a record 37,000 tons in 1996/97.
JAPAN
Japan's canned peach production is small because about 91 percent of the fresh peach production is dedicated to the fresh market. About 75 percent of Japan's canning peaches are white (Okubo variety) the remainder are yellow (Kanto variety).
While fresh production is estimated at 168,300 tons up 3 percent the canning varieties are estimated to be off by 6 percent because many producers are shifting production toward the higher value fresh varieties.
Domestic consumption in 1995/96 stabilized around 87,000 tons, down 9 percent from previous year's level of 95,000 tons, because the popularity of inexpensive canned fruit deserts has weakened.
Domestic product is priced at 400 yen, compared to U.S. product at 234 yen and Chinese white peaches at 98 to 198 yen. Yellow peaches from South Africa and Greece are priced at 150-200 yen.
Japanese imports of canned peaches have declined in response to the drop in domestic consumption, the revaluation of the yen, and significant supplies in importers' warehouses. The exchange rate was 85 yen to the dollar in July 1995, compared with about 109 yen to the dollar in July 1996. Imports for 1995/96 decreased 5 percent to 73,273 tons.
China and Greece continue to be the low cost suppliers of imported canned peaches. The United States is the highest priced supplier. Accordingly, because Japan is a price responsive market both China and Greece are the predominant suppliers. China's market share increased from 32 percent in 1994 to 38 percent in 1995 while Greece's share dropped from 33 percent to 28 percent. The U.S. market share is constant at 6 percent.
CANNED PEARS
The 1996/97 canned pear situation is characterized by higher production, higher exports, and lower stocks. Total canned pear production in the six selected foreign countries in 1996/97 is estimated at 166,873 tons, up 5 percent from last year. The canned pear pack is forecast to increase in every major producing country except the United States. Despite larger supplies, prices have been firm or higher than last year reflecting the lower stock levels throughout the world and continued strong demand in world markets. Total exports by the selected suppliers in 1996/97 are forecast at 133,176 tons, 9 percent above the previous year's level.
EUROPEAN UNION
The EU dominates the global canned pear industry. Outside the United States, the EU is both the world's largest producer and consumer of canned pears. Italy leads the EU in exports, primarily to other Community markets, especially Germany.
ITALY
Italy's canned pear industry is export driven
Italy's canned pear pack returned to average levels during the 1995/96 marketing year after a drop in the previous processing season. The 1995/96 pack was 46,000 tons, up 39 percent from the previous year's level and the 1996/97 pack is estimated at 48,000 tons up 4 percent. This increase is due to greater production of Williams pears, the preferred variety for processing.
Exports of canned pears increased more than the corresponding rise in production resulting in lower stock levels. Most of the exports go to European markets principally Germany and Great Britain. In 1995 exports to Germany reached 17,300 tons, representing 44 percent of Italy's shipment to the EU. Italy's shipments to the EU constitute more than 85 percent of its' total canned pear exports.
SPAIN
Spain's canned pear production for 1995/96 declined 29 percent from the previous year's high level of 16,300 tons. This year's pack is estimated at 17,800 tons representing an increase of 9 percent due to a strong European demand and reduced supplies from other European producers. Spain is forecast to export 90 percent of this year's pack and reduce stock levels from 8,475 tons to 2,325 tons. Over 86 percent of Spain's canned pears are exported to the EU. Nevertheless, Spain ranks a distant second after Italy in terms of EU canned pear exports.
AUSTRALIA
Production of canned pears for 1995/96 is estimated at 40,500 tons, up 13 percent from the previous year. This year's pack is estimated at 42,000 tons up 4 percent. Production increased this year due to favorable weather in the producing areas. However, future pear production, in the short and medium term, may be constrained due to the removal of trees in the Goulburn Valley, following flood damage, and the closure of the Letona canning factory in the Riverina area of New South Wales. Some pear growers are reported to be switching production to apples or grapes.
The Australian canned pear industry is focused on exports, primarily to the EU and Japan. Total exports in 1995/96 reached 33,500 tons, up 25 percent from the previous year. Exports for this year are forecast at 35,000 tons.
Australian stocks of canned pears are now estimated at 12,535 tons down 24 percent from last year and down 46 percent from 23,000 tons in 1993/94.
SOUTH AFRICA
South Africa is also an export-oriented producer of canned pears. The intake of pears for processing during the 1995/96 season increased by 20 percent to 125,110 tons. However, the actual use by the canning industry only amounted to 88,453 tons, the rest being taken up by the juice industry. The canned pear pack, nonetheless, increased by 37 percent to a record 36,117 tons.
Canned pack in 1996/97 is forecast at 37,923 tons, about 5 percent above last year's pack. This year's pack and stocks are the largest since 1987/88 when they respectively totaled 30,234 and 9,938 tons.
The canned fruit mixtures situation is characterized by a strong increase in production, a marginal increase in exports, and a decline in stocks. Output of canned fruit mixtures in selected foreign markets for 1996/97 is estimated at 228,663 tons, an increase of 6 percent from the previous year. The 1996/97 pack in the EU is forecast at 115,750 tons, up 6 percent. Production in major processing countries, France, Italy and Greece was mixed from the previous year. Greek output declined by 16 percent to 5,100 tons because canners are unable to compete with lower priced Italian product. Only three plants in Greece processed mixtures this season. The French pack increased 51 percent to 19,650 tons and the Italian pack is estimated to be up by 1 percent to 91,000 tons.
Total selected country exports of canned fruit mixtures in 1996/97 are forecast at 183,374 tons, up 1 percent from the previous year. EU exports are forecast to rise by 2 percent and the ending stock figure is forecast at 6,130 tons, up 5,000 tons due to a 51 percent increase in the French pack.
Total canned apricot production for 1996/97 in the four foreign selected countries is estimated at 66,572 tons, up 7 percent from the previous year. The 1995/96 Australian pack declined 58 percent to 4,050 tons, due to widespread frosts following an early flowering. In 1996/97 production is expected to reach 10,000 tons. Production in Greece continues its five year decline and is forecast at 10,500 tons, off 30 percent from the 1995/96 level of 15,018 tons. Greek production is expected to shrink even further in coming years due to the "Sharka" virus. South African production is estimated at 31,872 tons, 4 percent above the previous year.
Selected country exports in 1996/97 are forecast at 49,800 tons, in line with smaller exportable supplies. Exports are forecast to remain strong in all countries except Greece where exports are forecast to decline by 35 percent.
OUTLOOK FOR U.S. EXPORTS OF CANNED FRUIT
U.S. exports of canned deciduous fruit are forecast to do well despite keen competition from other suppliers. Compared with the year earlier period, canned peach exports for marketing year 1996/97 are projected to increase both in volume and value reflecting strong demand in certain markets. Exports of pears and mixtures are expected to decline from last year's level in volume but increase in value due to higher prices. Aggregate export volume in 1996/97 is forecast to rise by less than 1 percent from the previous year.
CANNED FRUIT MIXTURES
Fruit mixtures are the dominant element of U.S. trade in canned deciduous fruit. Exports for 1996/97 are forecast to decline about one percent from last year's level. Leading U.S. export markets include Canada and various Asian countries. High-cost producer Japan continues to take advantage of comparatively lower-priced imported canned fruit this past year. Increased competition from Australia and South Africa, and exchange rate movements in Canada and Japan, account for some of the fluctuation in these markets.
CANNED PEACHES
Last year's short crop, attractive pricing and strong international demand helped to reduce the large 1995/96 stock level to a more normal volume of about 39,430 tons. International prices and U.S. domestic prices should remain strong in the coming year. As a result, U.S. consumption is projected to drop, by 10 percent, from the previous year's level. Imports into the U.S. may increase from last year's level due to higher domestic prices. U.S. exports may exceed the previous year's level as canners attempt to be competitive in selected markets.
Canned peaches face stiff subsidized competition in important export markets
Canned peach exports are forecast to increase by 2,200 tons for the 1996/97 season, due to strong international demand. Among the major markets for U.S. canned peaches are Japan, Canada, Singapore, Hong Kong, Korea, and Taiwan. Competition from increasing production in Chile and subsidized Greek exports is expected to dampen growth of U.S. exports in South American countries. Although shipments to Mexico during the first year of NAFTA implementation were at record levels, the 1995 economic downturn lowered demand for U.S. canned peaches. In addition, subsidized competition from Greece into the Mexican market is making it very difficult for U.S. product to compete.
CANNED PEARS
The 1996/97 U.S. canned pear pack is estimated at 115,866 tons, down 29 percent from the 1995/96 pack of 163,852 tons. This year's pack is reduced due to severe freezing temperatures in the Yakima Valley in February. The stock situation following two straight years of short packs is best described as marginal. Normally, ending stocks are 2 « to 3 million cases, but this year the stock level is thought to be less than 1 million cases (one case equals 45 lbs net). The low stock level and short crop has resulted in much higher prices. Prices are quoted at $23 to $25 per case compared to $12 dollars last year.
Exports of canned pears in 1995/96 season totaled 7,400 tons, an increase of 56 percent over the previous year. Shipments to Canada represented 78 percent of total U.S. exports and shipments to Japan represented 8 percent of U.S. exports. Short U.S. supplies will put downward pressure on U.S. exports. However, U.S. canners have worked hard to maintain access to these two principal markets and intend to maintain their reputations as a reliable suppler.
APRICOTS
The 1996/97 U.S. apricot crop is estimated at 75,400 tons up 38 percent from last year's record low of 53,200 tons but off by 30,000 tons from the 1992-1994 average of 105,839 tons. Growers received $320/ton, an all time record price for this year's crop.
About 27 percent of this year's crop or 20,000 tons moved into canned product compared to 19,000 tons last year and 44,645 tons in 1994/95.
U.S. canned fruit marketing efforts in selected countries
Canada is the largest export market for U.S. canned fruit, taking $17.1 million for marketing year 1995/96 (June-May) a 22 percent increase over the previous year, despite a weak Canadian dollar. This accounts for 30 percent of all U.S. exports. Exports of pears and peaches expanded while cocktail sales were off slightly. While pressure from EU shippers has abated slightly, South African suppliers have provided some keen competition. However, the U.S. industry, through the MAP program, using a strategy of promoting new uses, special promotional sizes, and stressing "ready-to-eat" convenience has expanded sales of U.S. product.
Sales have declined to Japan, despite an increase in the total market, due to fierce competition from Greece, Australia, South Africa, and most recently, China. Canned peach exports to Japan totaled $4.5 million in 1995/96, a 5 percent decline from last year. Likewise, cocktail exports have declined 26 percent to $4.8 million. The U.S. industry hopes to turn the downward trend around through a strategy that emphasizes value and quality.
Shipments of canned peaches to Korea have expanded from $24,665 in 1991/92 to more than $2 million in 1995/96, despite heavy competition from Chinese and Philippine packers. Cocktail sales expanded to $942,000 in 1994/95, but dropped to $287,000 in 1995/96, primarily due to cheaper competition, and a confusion among Korean buyers between U.S. product and other fruit mixes. The U.S. industry is addressing this confusion using in-store promotions, public relations, and food service merchandising to educate the consumer.
(For further information, contact Robert Knapp, 202-720-6877; or FAX: 202-720-3799.)
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