EXPORT NEWS AND OPPORTUNITIES
direct U.S. table grape shipment arrives in Chile
The first container of California table grapes to be exported to Chile cleared quarantine inspection on August 22 and went on sale in Santiago supermarkets the following day, according to the agricultural attache in Santiago. This successful shipment concludes a prolonged effort by APHIS and FAS to get Chile to lower its quarantine barriers on grapes. While U.S. imports of table grapes from Chile exceed $250 million annually, Chilean quarantine regulations until recently excluded the import of most fresh fruits from the United States. On May 14, 1997, Secretary of Agriculture Dan Glickman announced the opening of Chile as an export market for California table grapes. Chile's Ministry of Agriculture agreed to allow the importation of table grapes provided APHIS can certify the products are free of Mediterranean fruit fly. Industry sources estimate the opening of the Chilean market is worth $2-3 million annually. While Chile also agreed in May to reduce phytosanitary barriers on California lemons, grapefruit, oranges and kiwifruit, rigid quarantine requirements still prevent the import of U.S. apples, pears and citrus from the states of Florida and Arizona.
New Zealand continues to open market to U.S. horticultural products; approves entry of mangoes
New Zealand plant quarantine authorities announced on September 9 the finalization of an Import Health Standard which clears the way for the entry of U.S. mangoes. The favorable decision on mangoes follows last January's action by New Zealand to approve imports of U.S. asparagus and Florida citrus. New Zealand represents a growing market for U.S. horticultural products. During the first six months of 1997, U.S. exports of fresh fruits and vegetables were valued at $7 million, up 40 percent from the same period in the preceding year. New Zealand's handling of phytosanitary-based market access issues stands in stark contrast to that of its neighbor, Australia, which continues to maintain a highly restrictive plant quarantine trade policy. Most U.S. fresh horticultural products remain banned from Australia's market and efforts to address these restrictions have met with little success over the years.
U.S. grape shipments resume to Mexico; FAS and industry representatives find solution to Mexican labeling problem
Meetings in September between U.S. and Mexican grape industry representatives, Mexican officials, and the Agricultural Minister-Counselor's office produced an amicable and successful solution to Mexico's recently enacted food labeling requirements which disrupted U.S. grape trade just as the export season was gearing up. Specifically, the three sides developed a proposed agreement which would allow grapes to enter Mexico without labeling restrictions for a period of 90 days or until at least November 30, allowing trade to resume through the end of the season. In the interim, Mexico will modify its regulations (NOM-120) to include a system of Verification Units which would allow labeling by exporters prior to crossing the border or labeling in-country by the importers.
On July 30, Mexican border officials began to interpret the new labeling regulations to require that Spanish-language labels be in place on grapes prior to importation. Numerous truckloads of U.S. grapes were temporarily detained at the border. There was confusion on both sides of the border regarding whether trade could meet the new requirements through the application of stickers after the shipments have entered Mexico. Working cooperatively, U.S. and Mexican parties were able to clarify the grape labeling issues so trade could resume. Mexico has emerged as an important market for U.S. grape exports. Exports were valued at nearly $11 million in CY1996 and, with the help of ongoing MAP promotional activities and NAFTA-related tariff reductions, are expected to expand further in the coming years.
Papaya: Industry on the rebound?
Over the past years, the presence of the Papaya Ringspot Virus (PRV) has caused serious damage to the U.S. papaya industry, resulting in declines in production and exports. However, due to recent research, scientists have created a new transgenic variety of papaya which is resistant to the PRV. The papaya industry is hopeful that this new variety will revive the current market potential and perhaps create some new export markets.
In 1996, Hawaiian papaya production was estimated at 18,960 metric tons, 18 percent below last year's level and 56 percent below the 1984 record of 36,514 tons. Most of the decline in production has been due to the presence of the PRV. Once only found on the Big Island, Hawaii, it has spread to the other islands of Oahu, Molokai, and Kuai'i. The Big Island, the largest producer of papaya, currently maintains about 3,000 acres of papaya. However, acreage on the Big Island, devoted to papaya has dropped in recent years due to the PRV. Some of the smaller islands of Hawaii are still producing disease free fruit. Officials hope that the good production of these islands will counterbalance the losses of the Big Island. The PRV has been difficult to control as farmers are hesitant to cut down their trees. To help maintain a certain level of papaya production, many farmers search for new acreage, resulting in some shift from sugar cane or pineapple fields.
Research is currently being done to create a new variety of
papaya. The new "Sunup", transgenic papaya is resistant
to the PRV. Some work still needs to be done before the
"Sunup" papaya is ready for the domestic and
international market. For export, the researchers are trying to
make the fruit smaller in size, as the Japan and Korea markets
prefer the "single serve" size fruit. In addition,
although the fruit has been approved by the USDA and EPA for
growing and harvesting, it is still waiting for approval for
human consumption by the FDA. Hawaii is hoping that the
"Sunup" variety of fruit will revive the state's papaya
production and export potential.
U.S. papaya exports currently account for approximately 8 percent of world papaya exports. In 1996, the United States exported 8,015 metric tons of papaya, a 2 percent increase from the 1995 level and a 50 percent decrease from the 1989 record. Most of the papaya exports originate in Hawaii. Japan and Canada are the main two export markets for Hawaiian papaya. However, industry sources noted they are interested in expanding their export markets to Guam, Korea, and the Middle East but because production has been so low over the past few years, their main focus is to maintain the current markets.
Hawaii markets its papaya as a high value, high quality, upscale market fruit. While other countries such as Thailand and other Asian countries also produce papaya, the Hawaii papaya is seen as being of better quality and able to command a premium price.
Improved access to Brazil's market for U.S. fruit achieved
Meetings between APHIS and FAS representatives and Brazilian officials July 29-31 in Sao Paulo and Brasilia produced favorable results relating to Brazil's recently imposed fumigation requirement on U.S. fruit. Specifically, Brazil agreed to rescind its mandatory fumigation requirement for all fruits, with the exception of peaches, nectarines, and apricots. For these three stone fruits, DDIV (Brazil's APHIS equivalent) was able to demonstrate legitimate grounds for maintaining the requirement, at least for the time being. As for the other fruits, APHIS has agreed to provide additional declarations on the phytosanitary certificate that relate to Brazil's identified quarantine concern.
Brazil first imposed its trade restrictive policy requiring the fumigation of all U.S. fruit following the detection of Pacific spider mites in several shipments of California stone fruit in late June. After initial written exchanges failed to resolve the issue, APHIS and FAS dispatched a team to Brazil to address the problem. 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.
U.S. export opportunity for tomato paste increases, as unfavorable weather this summer ruins nearly 50 percent of Turkey's industrial tomato crop
According to the U.S. Agricultural Counselor in Ankara, Turkey, the rainiest August in the past 42 years has badly damaged Turkey's 1997/98 industrial tomato (tomatoes intended for processing) crop. Excessive rain in the Marmara region, where 80 percent of Turkey's industrial tomatoes are grown, has caused a variety of problems, including mildew and leaf mold.
Reportedly, up to 50 percent of the Turkish tomato crop in the Marmara area may have been ruined by rain and the fungus problems that ensued. Due to these conditions, Turkey's tomato paste production forecast for 1997/98 has been reduced by about 35 percent, from 275,000 tons forecast earlier to 180,000 tons (28-30 degrees brix). Because of the lack of tomatoes for the fresh market, generally sold to cash paying customers, an increasing number of contracted farmers has been selling their produce to speculators. Processors have already signed some contracts this year to purchase industrial tomatoes at TL 8,500 per kilogram (USD=TL 166,000), but speculators are currently paying about TL 13,500 per kilogram, which they plan to sell later for TL 20,000 in the wholesale market.
The shortage of tomatoes has caused the cancellation of numerous export contracts, particularly at the quality end of the market. Processors are also under considerable financial pressure, since Turkey exports 70 percent of its production. Production shortages this year in a number of Mediterranean countries, including Turkey, have reportedly pushed export prices to US$1,000 per ton for 28-30 concentration paste, compared to US$700 per ton last year. In the meantime, the retail price of tomato paste on the Turkish market went from TL 120,000 in early August to TL 200,000 in late August.
In recent years, the bulk of Turkish tomato paste exports have gone to Japan (21 percent), Switzerland (10 percent), United Kingdom (7 percent), Germany (7 percent), Poland (6 percent), and Sweden (6 percent). Other smaller, but important markets include Saudi Arabia, Austria, Malaysia and Libya.
Turkey: Tomato Paste Production, Supply & Distribution
F = Forecast.
WORLD TRADE SITUATION AND POLICY UPDATES
USDA seeks expanded access to Thailand's citrus market; Thai technical team visited Texas and Arizona
As part of ongoing USDA efforts to secure market access in Thailand for Texas and Arizona citrus, a 4-person team from Thailand's Ministry of Agriculture visited those two states August 16-24. After a brief stop in Hawaii to observe the Medfly rearing facility, the team traveled to Texas and Arizona to visit citrus production areas and packing facilities. An overview of the states' pest and disease situations and related inspection and certification operations were provided. Representatives from APHIS/Riverdale, FAS/HTP, and FAS/AgAffairs/Bangkok also accompanied the team. The initiative was funded under the Emerging Markets Office's Technical Issue Resolution Fund.
Thailand's market first opened to California and Florida citrus in 1995, with commercial shipments commencing in early 1996. Shipments thus far have been modest, but are growing at a promising rate. Industry groups remain optimistic that, through market development efforts and Uruguay Round-based tariff reductions, Thailand will emerge as a significant market for U.S. citrus.
EU temporarily bans imports of Iranian pistachios due to aflatoxin
On September 8, the European Commission decided to ban all imports of Iranian pistachios following the discovery of some shipments of Iranian pistachios entering the European Union (EU) contaminated with aflatoxin B1, a known carcinogen. The EU directive authorizes systematic sampling of all pistachios at ports of entry and testing for aflatoxin B1. This temporary restriction on imports of Iranian pistachios will be reexamined in one month and then, if necessary, in two months. The ban will remain in effect until at least December 15. Iran has defended the safety of its pistachios, saying that the nuts were properly harvested and processed. The Iranian Agriculture Ministry suggested that the aflatoxin B1 detected in shipments of Iranian nuts could have resulted from contamination in a third country or bad storage.
Florida medfly and canker situation improving; citrus industry's export prospects follow suit
With the Mediterranean fruit fly and canker outbreaks now apparently under control, the export outlook for Florida's citrus industry is looking increasingly favorable. Major importing countries, notably Japan, have expressed satisfaction with the containment and eradication programs in place in Florida and are expected to continue purchases during the current season, although in some cases under modified certification and shipping requirements.
In the case of Japan, new quarantine requirements were imposed effective September 1, 1997, on imports of fresh produce from Florida. The new requirements apply to fresh produce originating outside quarantine areas in five Florida counties (Hillsborough, Polk, Manatee, Orange, and Sarasota). Japan will continue to bar imports of commodities produced within the Medfly quarantine areas. The key changes to Japan's policy include: 1) a doubling of the sampling rate for the import inspection of host products from Florida; 2) a requirement to undertake safeguard measures for fruit transiting through quarantine-regulated areas and; 3) a requirement that the phytosanitary certificate include an additional declaration stating that the product originated from an area outside of the quarantine-regulated area for Medfly.
Following the first Medfly detection in May, and subsequent detection of citrus canker in June, federal, state and industry officials mounted aggressive containment and eradication programs in and around the affected areas in Florida. These efforts now appear to be producing their intended results and, in fact, it is anticipated that Medfly will be declared officially eradicated in the near future. This improving situation comes just as Florida's citrus industry is about to enter its peak export season. U.S. grapefruit exports to all destinations, the vast majority of which originate in Florida, were valued at $236 million through the first 11 months of Marketing Year 1996/97 (September-August).
Mexico imposes 101.1 percent anti-dumping duty on imports of U.S. apples
Mexico announced on September 1 in its preliminary anti-dumping finding that it has imposed, effective immediately, a provisional compensatory duty of 101.1 percent on imports of both varieties of U.S. apples mentioned in the case -- Red and Golden Delicious. The announcement did not mention which companies would be affected. This duty is likely to severely restrict U.S. apple exports to this important market, which grew from $9 million in CY 1990 to over $70 million in CY 1994 before the peso devaluation and subsequently recovered to $42 million in CY 1996. Red and Golden Delicious apples comprise approximately 75 percent of total U.S. apple exports to Mexico. The petition which launched the investigation was filed in March 1997 by a regional fruit growers association in the Northern State of Chihuahua. A public hearing in SECOFI offices originally scheduled for August 22 has been rescheduled for October 16. All interested parties may also submit additional arguments during a 30 working day period beginning September 2. The compensatory duty is expected to have an immediate negative effect on U.S. apple shipments to Mexico as importers stall their purchases until SECOFI finalizes its resolution of the case.
Australia says no to U.S. almond treatment proposal
Australia's plant quarantine agency, AQIS, has apparently decided to reject a U.S. treatment proposal that would have better facilitated exports of U.S. almonds to this important market, according to a report from the U.S. Agricultural Counselor in Canberra. This setback comes just as the industry is beginning the harvest of this year's crop, and serves as yet another illustration of the Australian Government's restrictive phytosanitary import policy.
Nearly two years ago, AQIS announced that the U.S. industry's longstanding practice of phosphine fumigation of its shipments to that market was unacceptable. Instead, AQIS specified a phosphine treatment regimen that was incompatible with the U.S. registration, thereby requiring the industry to adopt the less desirable alternative of methyl bromide fumigation. USDA efforts to secure modifications to the Australian policy to permit once again the use of phosphine fumigation at U.S. approved levels are ongoing.