World Horticultural and Tropical Products Circular

This report draws on information from USDA's global network of agricultural attaches and counselors, official statistics of foreign governments, other foreign source materials, and results of office analysis.

This report is based on unrounded data; numbers may not add to totals because of rounding.

Further information may be obtained by writing or calling the division at Horticultural and Tropical Products Division, AG Box 1049, Washington, DC 20250-1049. Telephone: 202-720-6590 Fax: 202-720-3799

The next issue of WORLD HORTICULTURAL TRADE AND U.S. EXPORT OPPORTUNITIES will be available electronically after 3:30 pm on July 1, 1997.

Fruit access problem with Brazil continues, joint APHIS/FAS team visit planned

Brazil continues to hold to its policy that all fruit shipments from the United States are to be fumigated, as of July 31, 1997. Shipments via air continue to be covered by the fumigation at origin requirement. FAS and APHIS have just sent a technical team to Brazil to secure a timely resolution to this problem. Brazil imposed its fumigation at origin requirement for U.S. fruit effective June 27, 1997, following the alleged detections of Pacific spider mite and thrips in recent shipments of California stone fruit. APHIS requested that Brazil drop its recently imposed fumigation at origin requirement for U.S. fruit in favor of a policy of fumigating only problem shipments upon arrival (i.e., in cases where they detect a pest of quarantine concern). Brazil's plant quarantine agency, DDIV, responded on July 8 that the option of fumigation upon arrival for sea shipments would be permitted upon publication of a directive that authorizes the use of pure methyl bromide.

U.S. fresh fruit exports to Brazil have risen sharply in recent years. In CY 1996, shipments were valued at $21.5 million, with apples, pears, grapes, and stone fruit accounting for the bulk of the total. Without further favorable modifications, Brazil's new mandatory fumigation requirement could disrupt and/or dampen prospects for future exports. Since first arising in late June, the policy has so far resulted in the destruction of $85,000 worth of U.S. stone fruit.

Efforts increase to prevent disruption of California citrus exports to Korea

FAS, APHIS, and California citrus representatives are increasing efforts to head off a potential trade problem. Reported recent detections by Korean inspectors of red scale on California orange shipments have resulted in widespread fumigation of shipments. The detections have also caused considerable negative press in Korea, including suggestions that imports from California might be suspended, if the problem is not corrected. Preliminary reports indicate that the pest is not found in Korea and may be a legitimate quarantine concern. APHIS, state, and industry officials in California are stepping up efforts to ensure that shipments are free of red scale. In addition, FAS and APHIS are seeking through the ROKG to maintain the option of fumigating problem shipments upon arrival in Korea.

Korea established an import quota mechanism for oranges, as provided under the Uruguay Round, in 1995. Since then, it has sourced essentially all of its orange imports from the United States, primarily California. U.S. orange exports to Korea in CY 1996 were valued at $14.2 million. Beginning July 1, 1997, out-of-quota imports were permitted by the ROKG for the first time, a development expected to lead to a significant increase in U.S. sales over the next several years.

Trade fallout from the Medfly and citrus canker situations in Florida has thus far been limited. The current seasonal lull in citrus exports could be contributing to this situation. Federal, state, and industry officials have stepped up efforts to control and eradicate the outbreaks. According to APHIS sources, the Medfly trapping count stood at 713 as of July 24, 1997, with trappings confirmed in 5 Florida counties: 661 Medflies in Hillsborough, 36 in Polk, 10 in Manatee, 4 in Orange, and 2 in Sarasota. Meanwhile, canker has reportedly been confirmed in 14 properties, all in Manatee County.

Grenada, which had earlier banned fresh produce imports from Florida, subsequently decided to issue import licenses again. Barbados, however, has blocked fruit imported from Florida because of the Medfly detections in and around Tampa. Although Barbados is not a major market, its action is a clear demonstration that the ongoing situation is getting the attention of overseas customers.

More than 250 fruits and vegetables are potential hosts for Medfly. In an effort to eradicate this destructive pest before it becomes established in Florida, federal and state officials have mounted an all-out attack. This has included intensified trapping in and around infested areas, aerial and ground Malathion bait-spray applications, and treating the soil at larval sites with diazinon. APHIS has also launched a sterile Medfly-release program in western Hillsborough County, beginning on July 25. As many as 300 million sterile Medflies may be released weekly in western Hillsborough. Releasing overwhelming numbers of sterile Medflies is effective against low-level, wild Medfly populations.

The International Trade Commission (ITC) released on July 18 a study identifying several policies and economic factors affecting U.S.-Canada potato trade. In response to U.S. potato industry concerns about unfair competition in the U.S. market and access barriers in Canada and a request from the U.S. Trade Representative, the ITC recently conducted a 6 month Section 332 investigation of the structure and performance of the U.S. and Canadian potato industries.

The ITC study concluded that U.S. imports - mainly from Canada - have increased to a level equaling 6 percent of U.S. consumption, but are still lower than U.S. exports. It also noted that a 10 percent decline in the real exchange rate of the Canadian dollar since 1988 has accounted for some of the growing Canadian price advantage in the Northeast U.S. market. U.S. potato exports into British Columbia face a long standing antidumping duty order which pushes U.S. prices above those of BC potatoes. Canada's regulation giving preference to bulk shipments of fresh potatoes produced within each province also restricts imports. In the area of government subsidies for production and processing, the ITC report noted that it is impossible to quantify the level of such support for each country.

Efforts are continuing toward developing USDA's Quality Through Verification (QTV) program, an initiative being administered by the Agricultural Marketing Service (AMS). QTV is a voluntary, user-fee program. Under QTV, AMS experts work with company management to validate the facility's hazard analysis critical control point (HACCP) plan and, through on-site audits, verify its effectiveness. HACCP is a scientific, analytical, and economical approach for ensuring food safety. QTV provides for reduced auditing costs where a facility has established a documented and verified performance history. QTV is currently in a developmental "pilot" phase.

To date, three fresh-cut firms have been validated by AMS and are participating in the pilot program. Firms participating in the pilot can use the QTV shield, designed for recognition by customers, on the packaging of covered product. Such a logo could have potential marketing advantages in certain markets, like Japan, where consumers are placing increased emphasis on wholesomeness and quality.

Companies wishing to apply for services or obtain additional information can contact: Chief, Processed Products Branch, Fruit and Vegetable Division , Agricultural Marketing Service, U.S. Department of Agriculture, P.O. Box 96456, Rm. 0709-S, Stop 0247, Washington, DC 20090-6456, Tel.: (202) 720-4693, Fax: (202) 690-1527

Vietnam rescinds import ban on high value horticultural and other agricultural products

The Government of Vietnam lifted its temporary ban on imports of a range of consumer agricultural products effective July 23, 1997, according to a report from the Agricultural Attache in Hanoi. Among the horticultural products included under the ban, which lasted a few days in July, were dried fruits, nuts, confectionaries, and assorted fruit juices (concentrate and single strength).

Since the lifting of the trade embargo in February 1994, U.S. exports of horticultural commodities to Vietnam have shown solid growth. For the 12-month period ending April 1997, U.S. horticultural shipments to Vietnam were officially valued at only $4.5 million. However, indirect exports, especially through Singapore and Hong Kong, make the true total higher. Grapes, apples and citrus are the leading exports, with other products making inroads.

Southern Hemisphere Wine Production and Export Outlook

The selected Southern Hemisphere wine producing countries (Argentina, Australia, Chile and South Africa) are strategically preparing to increase their export potential by 2000/01. Argentina is investing in new technology, such as stainless steel wine casks and replacing old oak ones. Also, Argentina is trying to increase its share of bottled wine exports. Australia is expected to increase its supply of wine grapes by 46 percent between 1995/96 and 2001/2002. The vast majority of Australia's increase in grape production will comprise premium exportable wine grape varieties. Australian wine exports are forecast to increase sharply to around 4.1 million hl in 2001/02. Chile expects to expand wine exports to its new MERCOSUR partners, Argentina, Brazil, Paraguay and Uruguay, as duties on Chilean wine are phased out over the next 5 years. Also South Africa, no longer under economic sanctions, is aggressively marketing its wine abroad to capitalize on potential exports. Thus, the U.S. wine industry, which has experienced booming exports in recent years, will face increasing competition, both in the United States and in third country markets.

Argentina's wine production in 1996 is estimated at 12.7 million hectoliters (hl), down 23 percent from 1995. Wine production decreased because of adverse weather, especially frosts, which sharply reduced wine grape yields. According to the Argentine Wine Institute, grapes crushed for wine in 1996 fell by 29 percent, to approximately 2.0 million metric tons. The 1997 wine grape crop is expected to be 13 percent higher than in 1996 in spite of rains during harvest (April-May) which delayed the grape harvest.

Argentina is expected to increase its wine export potential in the next few years. Argentina is incorporating new technology such as purchasing more stainless steel wine casks and replacing some old oak ones. Also in Mendoza, the largest wine producing region, accounting for approximately 68 percent of area planted to vineyards in 1996, producers are trying to export more bottled wines instead of bulk wines, so that the added value will remain in the region. Producers in Mendoza are also uprooting old vines and replacing them with premium export varieties.

Argentina remained a net exporter of wine in 1996. Total Argentine wine exports in 1996 reached 1.3 million hl. Ordinary table wines accounted for 78 percent of total exports. Spain, Paraguay and South Africa collectively purchased 71 percent of the total 1.05 million hl of ordinary table wine. Premium wines accounted for 21 percent of total wine exports. Argentina's principal export markets for premium wine were the United Kingdom, the United States and Russia. Sparkling wine exports in 1996 totaled 2,573 hl; Paraguay, Uruguay, and Peru were the primary export destinations with 28 percent, 25 percent, and 6 percent, respectively. Argentina is reportedly trying to expand export markets in 1997. Argentine exporters are negotiating sales of premium bottled wine to South East Asia.

Argentina imported 43,934 hl of wine in 1996, down 6 percent from 1995. Chile supplied 54 percent of Argentina's total wine imports, while Spain and France supplied 13 and 10 percent of the imports respectively. Premium wines accounted for 40 percent of total wine imports with Chile, Germany and Italy supplying the bulk of the premium wine imports. Sparkling wine imports represented 32 percent of total wine imports.

The supply of grapes for wine making in Australia is estimated at 870,480 metric tons in 1995/96. The 1995/96 year was larger than the previous drought-affected year. High yields and an extended harvest, due to cooler weather, helped increase the 1995/96 wine production. In 1996/97, total wine grape output is expected to decrease slightly to 855,300 tons because of heavy rain in the Hunter Valley. However, the rain was beneficial to regions such as the Barossa Valley. A small increase in the number of bearing vines cushioned the reduction in production for 1996/97.

Australia's supply of wine grapes is expected to increase by 46 percent between 1995/96 and 2001/2002. The vast majority of the medium term increases in grape production will comprise premium wine grape varieties, particularly chardonnay, verdelho, shiraz and cabernet sauvignon. Premium variety production is projected to account for almost 75 percent of total wine production in 2000/02.

Australian wine consumption has increased and consumers have become more sophisticated over the past three decades. The influx of immigrants, from countries where wine drinking was accepted practice, helped increase consumption in the late 1960's. During the 1970's the introduction of the wine cask helped accelerate growth, as did the mass marketing campaigns undertaken by large corporations. The availability of new grape varieties in the 1970's and early 1980's increased the range of wines available to consumers. Because of increased grape varieties and developments, per capita wine consumption in Australia has increased from 6 liters per capita in the mid 1960's to approximately 18 liters per capita in 1996. Australian consumers have become more sophisticated wine drinkers, and are consuming less, but of a higher quality and price.

Australian wine exports reached 1.5 million hl in 1996, up 28 percent from 1995. The following graph highlights Australian exports.

In value terms Australian exports reached $748.9million, up 34 percent. Australia's major export markets were the United Kingdom, the United States, and New Zealand. The United Kingdom accounted for 50 percent of Australian exports. The United States and New Zealand accounted for 13 and 10 percent, respectively. Export sales of Australian wines are being driven largely by sales of premium dry table wines. Dry table wines have consistently represented around 90 percent of Australia's export wine sales. Exports of premium bottled wines have been increasing faster than cast and bulk wine.

Australian wine imports in 1996 totaled 42,470 hl, down 28 percent from 1995. Imports usually comprise less than 5 percent of the total volume of domestic wine sales. Italy supplied 40 percent of Australia's wine imports, followed by New Zealand and France with 13 and 12 percent, respectively. The average value of imports in 1996 increased to $5.96 per bottle, up 23 percent from 1995. The average import value of wine increased due to a reduction in imports of low value bulk wine. As wine grape yields increased in 1996, wine imports from Chile and Argentina, major bulk wine suppliers, decreased 70 and 20 percent, respectively.

Recent reports indicate that the less than $13.50 a bottle market segment has been under supplied due to the sharp increase in Australian wine exports in recent years. Thus, market opportunities exist for U.S. firms which can supply wine to this Australian domestic market segment.

Chile's wine production in 1996 is estimated at 4.6 million hl, up 19 percent from 1995. Excellent weather during the spring and a dry summer led to larger wine grape production in 1996. In addition, more table grapes were diverted to wine production because of increased amounts of table grapes unsuitable for fresh exports. The following table highlights Chile's wine production, supply and distribution.

The 1996 national Chilean wine survey shows that total wine grape planted area is 546,003 hectares, 3 percent above the 1995 area. Area planted to export varieties has doubled over the last 10 years as a percentage of total area. Approximately 29,000 hectares of the total planted area is planted to export-quality varieties. As a result of new plantings and replanting of export varieties, total exportable wine production is expected to expand over 40 percent through the year 2000. Total planted area expanded slightly again in 1996, according to industry sources. Planted area of traditional vineyards is expected to fall further in coming years.

Wine production in 1997 is forecast at 4.9 million hl, up 6 percent from 1996. The larger wine grape harvest and increased wine production in 1997 is a result of excellent weather during most of the growing season. The quality of the vintage is also expected to be excellent.

Chilean wine exports continue to boom beyond previous projections. The value of the 1996 export sales was up 43 percent to $231 million. In volume terms, Chilean exports increased 42 percent to 1.8 million hl. Chile exports both bottled and bulk wine to over 70 countries. The volume of bottled wine exports has been variable but has trended upward during the last few years. Bottle wine with a certificate of origin represented 41 percent of the total wine exports in 1996. The United States and the United Kingdom are the largest markets for Chilean bottled wine. Canada was Chile's largest bulk wine market in 1996. Over 44 percent of Chile's wine exports in volume terms currently go to NAFTA countries. Chile exported 98,705 hl of wine to MERCOSUR countries (Argentina, Brazil, Paraguay and Uruguay). MERCOSUR countries account for only 5 percent of Chile's total wine exports, down 8 percent from a year earlier.

The Chilean wine industry had expected to expand exports to its neighboring countries, but as a result of the MERCOSUR agreement wine exports to these countries will continue to pay a duty for 10 years and then will be phased to zero over a 5 year period. Argentina on the other hand, the largest wine producer in MERCOSUR, enjoys an immediate 5 year phase-out of the current 11 percent duty on its wine exports to Chile.

Early sales point to at least a 30 percent jump in exports in 1997. The value of wine exports from January-April was up almost 58 percent when compared to the same period in 1996. The Chilean Wine Exporters Association predicts that export wine sales in 1997 will reach $380 million. Chilean wine exports are forecast to reach at least $450 million by the year 2000, with wine production expanding to 250 million hl due to additional plantings and replacement of existing vineyards.

In 1996, South African wine production increased by 5 percent to 10.1 million hl. This growth is due to an increase in the area planted to wine grapes and excellent weather conditions. In 1996, the area under vine production increased slightly from 103,325 to 105,608 hectares. Wine grapes constitute 93 percent of entire vine production, table grapes 6 percent, rootstock and currants the remaining amount. South Africa mainly produces certified natural wine and white wine. In 1996, white wine represented 89 percent, and red wines 13 percent.

Wine production for 1997 is forecast down by 3 percent to 9.6 million hl, because of sporadic rainfall. Sporadic rainfall inhibited application of effective spraying programs to control troublesome diseases like Downey Mildew and Powdery Mildew which reduced the quality of the wine grape crop.

In South Africa, wine is mainly produced by individual producers and producer cooperatives, mainly in the Western Cape. Most producers' cooperatives operate under the auspices of the Cooperative Wine grower Association of South Africa (KWV). Since the new Agricultural Marketing Act was implemented in September 1996, several agricultural cooperatives are changing to companies. This is the case with the KWV; however, the South African Minister of Agriculture maintains most of the KWV's assets were accrued because of state intervention. Thus, the Minister of Agriculture maintains, the state has a stake in KMV. As a result, KMV will only be able to move to "company" status after reaching a mutually suitable settlement with the Ministry of Agriculture.

In 1996, South Africa exported 1.2 million hl of wine compared with 1.3 million hl in 1995. South African wine is exported to more than 60 countries, in the European Union, Scandinavia, the United States, the Far East and Africa. The United Kingdom was the largest export market for South African wine accounting for 39 percent of total exports.

South Africa is trying to regain the export market it lost during the period of economic sanctions. It is engaged in extensive market development activities focused on Germany and the United States. In 1996, KWV acquired 75 percent of the shares of Eggers & Frankel, a German company, in an effort to bolster its market penetration. Similar efforts are in process in other countries. South African wine exports are getting off to a good start because of (1) extensive overseas market development efforts; (2) its ability to supply quality exportable wine; and (3) the price competitiveness of South African wines. The depreciating South African currency, the rand, helped South African wine exports gain price competitiveness in international markets.

In 1996, South African wine imports also increased dramatically, up 63 percent to 181,129 hl. Argentina supplied 82 percent of South African imports in 1996, mainly bulk wine. Increases in the prices of quality wine paved a way for significant increases in wine imports. Presently, there are approximately 800 imported brands in South Africa from 15 countries. Imported brands account for 45 percent of the domestic wine consumption.

Opportunities exist to sell additional wine to South Africa. Since the installation of the Government of National Unity in 1994, South Africa has increased its imports dramatically. South Africa, with a population of 46 million, offers good market prospects for U.S. wines. According to South African trade sources, South Africans are longing for good, affordable wines. The current consumption levels indicate that the big market is the lower to middle price level, for example between $2.24 and $7.85 per 750 ml bottle. Market opportunities exist for U.S. wines in the higher price market by targeting restaurants, hotels and clubs. Indications are that in 1997 season there will be a shortage of red wine because of increased export demand, higher domestic consumption and shortages of certain varieties. Therefore, market opportunities also exist in South Africa for U.S. red wines.

For further information on supply, distribution and trade, contact Yvette Wedderburn Bomersheim at 202-720-9903. For information on U.S. marketing opportunities, contact Gina Castelnovo at 202-720-0898.

Asparagus Production and Trade in Selected Countries

Asparagus exports from selected countries in 1997 are forecast at a record 154,000 tons, up 12 percent from last year. Peru, the world's largest exporter, is expected to account for the lion's share of the increase, with exports forecast at a record 97,000 tons (including fresh and processed). The United States continued to be Peru's biggest customer for fresh green asparagus, with Spain, Netherlands, France, Germany and Denmark being Peru's largest processed asparagus buyers. Japan, Canada, Switzerland and other EU countries are expected once again to be major markets for U.S. fresh asparagus sales in 1997. U.S. exports of fresh asparagus in 1996 valued at $52 million (14,377 tons) declined 21 percent from the previous year, due mostly to reduced sales to Japan caused by health scares erroneously connected to fresh produce. According to U.S. official statistics for the first 5 months of this year, U.S. exports of fresh asparagus valued at $12.5 million are 4 percent above the same period a year earlier.

Fresh asparagus production in 1997 in 5 selected countries is estimated at 375,300 metric tons, up 2 percent from 1996. Production increases in Peru, Mexico and the United States will likely more than offset a decrease in Spain.

The United States continues to be the world's second largest producer of fresh asparagus. In 1997, U.S. production of fresh and processed asparagus is estimated at 100,000 tons, up slightly from 1996, but down about 1 percent from 1995. In 1996, reduced planted area, lower yields per hectare and unfavorable weather in several producing states were the major factors contributing to lower production. In 1996, production of fresh and processed asparagus provided $157 million in cash receipts to U.S. farmers, down 11 percent from 1995.

In 1996, exports of fresh asparagus from the United States totaled 14,377 tons valued at $52 million, down 22 percent in volume and 21 percent in value from the previous year. A smaller U.S. harvest and reduced shipments to Japan--the biggest U.S. customer, due to the E.coli crisis erroneously attributed to fresh produce, are the reasons for the lower exports. U.S. exports of fresh asparagus to Switzerland, a small but key cash market for U.S. growers, rebounded to 1,988 tons in 1996 from 1,075 tons shipped in 1995. This rise was partly attributed to an aggressive effort by the U.S. industry in developing a working dialogue between the Swiss government and private trade. U.S. asparagus exports to Switzerland from May 1 to June 15 are sold under a tariff-rate quota system. See policy section under Switzerland for further details.

Peru is the world's largest producer of fresh asparagus. Asparagus production in Peru in 1997 is estimated at 140,000 tons, up 10 percent from 1996. A steady growth in production is expected over the next 5 years.

Peru is one of the few countries where good quality asparagus is produced year round, due to warm and favorable weather in which the asparagus plant does not enter a dormant stage. Peru produces asparagus for two different markets: green asparagus for the United States, and white asparagus for the European market. Green asparagus, accounting for about 35 percent of total production, is packed fresh in 5 kilogram boxes and exported to the United States, while white asparagus is processed in cans and/or jars and exported to Europe.

The average yields are around 6 tons per hectare, but can reach as high as 18 tons per hectare among some of the most efficient producers. Asparagus producers in the Ica region are generally more efficient producers. Because surface water only flows from November to March, most of them have wells and drip irrigation systems, which make water available but expensive, due to the cost of fuel. Green asparagus production requires more water than white asparagus.

The recent reduction in import tariffs on some agricultural inputs, and new phytosanitary regulations on seed imports, should provide a small boost to the asparagus sector. Producers complain that the GOP has not done enough to repair and expand irrigation systems, expedite land reform, and reduce industrial taxes which could further lower their costs of production.

In 1997, exports of processed asparagus are forecast at 79,000 tons, up 14 percent from a year ago, mainly due to increased foreign demand and larger domestic output. Peru's most important processed asparagus customers are Spain, Netherlands, France, Germany and Denmark. During the same period, exports of fresh asparagus are forecast at 18,000 tons, up 16 percent from 1996. The United States is the main market for Peru's fresh asparagus.

Peruvian asparagus exports have faced adverse publicity due to claims by Spanish sanitary authorities that two recent cases of botulism were caused by consumption of canned Peruvian asparagus. Even though the Peruvian government and private sector officials, mainly Prompex, tried to argue against this issue, the press coverage has left an unfavorable impression among consumers in the European market.

The Government of Peru (GOP) does not have an official policy to encourage asparagus production. Most of the GOP's promotion efforts are on the marketing side through Prompex (the export promotion committee). According to the U.S. Agricultural Attache, this organization is fairly new and has been very active and successful in promoting agricultural exports.

Production of fresh asparagus in Mexico in 1997 is forecast at 31,000 tons, up 7 percent from the revised 1996 estimate due to higher yields resulting from favorable weather conditions. However, planted area was down due to high production costs, problems with viruses and other diseases in the Bajio region, and lack of water availability in the northern areas.

Over 95 percent of Mexico's asparagus is produced in Sonora, Baja California and Guanajuato, with the rest of the production coming from the states of Nuevo Leon, Coahulia and Baja California Sur. Mexico produces two asparagus crops. The major crop is harvested in Baja California and Sonora from late December through early April. A second, but smaller crop is harvested from late June through September in the Bajio region (Guanajuato State). All asparagus production in Mexico is irrigated. The most common method is gravity irrigation.

The average farmgate price received for asparagus from the Bajio region in August 1996, was about US$2.49 per kilogram and farmgate price in Baja California in January 1997 was about US$2.10 per kilogram.

In Mexico, consumption of asparagus is a residual market, with most of the production slated for export. In 1997, fresh consumption is forecast at 9,500 tons, unchanged from the previous year. Most asparagus consumed domestically is sold to restaurants. Growers estimate that about 300 tons of production goes for processing.

Mexico's exports of asparagus in 1997 are forecast at 21,500 tons, up 10 percent from 1996, mainly due to a slight rise in production. The United States is Mexico's largest export market for asparagus.

Mexico's exports to the United States peak from the last week of December to the end of January, when U.S. supplies are low. Prices are traditionally higher during this period. Mexico's exports to the U.S. continue until March when production begins in the Stockton/Delta region of California. Mexico also exports fresh asparagus to the U.S. during the summer months, from the last week of June to the end of September. U.S. market prices for January to February 1997 ranged from US$3.60 per kilogram to about US$4.50 per kilogram.

Asparagus imports are subject to a 10 percent duty, except when from the United States where a separate NAFTA tariff schedule applies.

Under NAFTA, Mexico matched the U.S. seasonal tariff lines and phase-out schedule, but will use a 10-year transition period instead of a 15-year period used by the United States. The tariff classification numbers are HS 0709.20.10 and 0709.20.90.

Under NAFTA, Mexico's asparagus tariff schedule for imported asparagus from the United States are: January 1 to 31, duty is 6 percent in 1997 with a 10 year phase out; February 1 to June 30, duty is 6 percent with a 10 year phase out; July 1 to December 31, duty is 2 percent with a 5 year phase out; September 15 to November 15, duty is free; and January 1 to December 31 the duty is free for white asparagus.

Production of asparagus in Switzerland is approximately 200 tons, about 2 percent of domestic consumption annually.

Switzerland continues to be a very good market for U.S. fresh asparagus because of the Swiss preference for larger-stalked asparagus. The Swiss are willing to pay a premium price for this product which U.S. exporters have found almost impossible to sell in most other markets.

U.S. exports of fresh green asparagus continue to enjoy strong demand in Switzerland, but face stronger competition from other EU producers and a tariff-rate quota system in Switzerland.

In calendar year 1996, U.S. exports of fresh green asparagus to Switzerland rebounded to 1,988 tons valued at $6.6 million from 1,075 tons valued at $3.9 million in 1995. The major U.S. competitors in the Swiss market, selling mostly white asparagus, continue to be France and Spain, whose market share in 1996 were 30 and 23 percent, respectively. The U.S. share in 1996, including less than 1 percent white asparagus, was 44 percent, up from 38 percent the previous year. From January to April 1997, U.S. market share of green asparagus in Switzerland dropped to 40 percent. The main reasons for the declines were a strong U.S. dollar and expanding production in Spain. Because of Spain's low production and freight costs, Swiss imports of green asparagus from Spain totaled 461 tons for the January to April 1997 period, compared to 209 tons for the entire year of 1996.

Following the implementation of Switzerland's Uruguay Round commitments on July 1, 1995, the "three-phase" system was eliminated and replaced by a tariff-rate quota system. The new system allows the Swiss to impose a tariff-equivalent of 8.64 Swiss Francs per kilogram to ensure utilization of domestic production of fresh green asparagus.

The Swiss government sets allowable quantities of imports at the in-quota rate during May 1 to June 15 of each year based on input from the advisory committee. The committee includes representatives of producer, consumer, and importer groups. The Swiss conceded in bilateral negotiations to set weekly minimum allowable import quantities well in advance. This improves transparency in the market and provides U.S. exporters with more certainty of specific import opportunities during the period of restriction.

Currently, the quantity of imports allowed at the lower duty for May 1 to June 15 period is set on a weekly basis. The quota is divided among traditional importers on the basis of historical share. In 1997, Switzerland established the following minimum quantities for weekly imports: Week 19, unlimited; week 20, 50 tons; week 21, 30 tons; week 22, 20 tons; week 23, 10 tons; week 24, 20 tons; and week 25, unlimited. According to the U.S. Agricultural Attache in Geneva, total Swiss imports of fresh green asparagus from the United States from May through June 1997 totaled 371 tons.

Germany is a major producer and consumer of asparagus. In 1997, German production of asparagus, mostly white, is estimated at 35,000 tons, unchanged from 1996, but up 9 percent from the previous year. Area harvested in 1997 is estimated at 10,000 hectares, unchanged from 1996, and up 10 percent from 1995.

According to the U.S. Agricultural Counselor in Bonn, Germany's per capita consumption rate of 0.9 kilograms annually is one of the highest in the world. Domestic production accounts for only 45 percent of consumption, making Germany an attractive import market. The United States supplies Germany with only 1 percent of its total asparagus imports annually, but during the first 3 months of each year, the U.S. share usually approximates 5 percent. In 1996, German consumption of asparagus is estimated at 77,000 tons, up 3 percent from 1995.

In 1996, German imports of asparagus totaled 42,725 tons, down slightly from the revised 1995 level. Greece continued to be the major supplier, accounting for 57 percent of total German imports, followed by Spain with 16 percent, the Netherlands with 15 percent and France with 6 percent. U.S. exports of green asparagus to Germany in 1996 totaled 402 tons valued at US$1.4 million, down about 7 percent in volume from the previous year. Germany exports small quantities of asparagus, mainly to Austria and the Netherlands.

Production of asparagus in the United Kingdom remains small. In 1997, production is forecast at 1,526 tons, up slightly from the revised 1996 output. Planting of asparagus crowns takes place in February, and harvesting begins in mid-April and runs through the end of June. The primary growing areas are Scotland, Norfolk, Suffolk, Cambridge shire, Cornwall and Kent. Green asparagus accounts for the bulk of production in the United Kingdom.

In 1997, per capita consumption of asparagus in the United Kingdom remained unchanged at 0.38 kilograms. In 1992, per capita consumption was 0.14 kilograms. According to the U.S. Agricultural Counselor, the U.K.'s Asparagus Growers' Association conducted a poster campaign this season using the slogan "Fresh British Asparagus". During the campaign, recipe booklets and other information on asparagus were made available to the trade and general public. No other competitor promotional activity was noted during the past year.

U.K. imports of green asparagus in 1997 are forecast at 2,200 tons, up 7 percent from the previous year. The United States was the major supplier in 1996, accounting for 38 percent of total imports, followed by Peru with 30 percent, and Thailand with 5 percent. Other important, but smaller suppliers included Chile, Ecuador, Mexico, Zimbabwe and South Africa.

All product marketed in the United Kingdom is subject to compliance with European Union quality standards, pesticide and plant health legislation. Imports from the United States are subject to the full duty rate of 14.1 percent, down from 16 percent, under tariff code 0709200000. Once the GATT-Uruguay agreement has been fully implemented the duty rate will be reduced to 10.2 percent.

For further information on production and trade, contact Emanuel McNeil at 202-720-2083.