PROCESSED SWEET CORN SITUATION IN SELECTED COUNTRIES
|U.S. sweet corn production for processing in 1998 is estimated at 2.9 million metric tons, down 3 percent from the previous year, due to a slight drop in contracted acreage. During the first 9 months of 1998, U.S. canned sweet corn (CSC) exports totaled slightly over 130,000 tons, down 15 percent from the same period in 1997. The decline in U.S. exports of CSC in 1998 was largely due to recessions in Asia, particularly in Japan. CSC exports from the United States to Hong Kong and Korea also recorded significant declines during this same period. U.S. exports of CSC in 1999 are expected to remain sluggish because of the situation in Asia. Production of CSC for processing in France in 1998, is expected to remain at about the 1997 level. Despite the economic crisis in Asia, Thailands CSC production continued to increase in 1998, and is forecast to continue to grow in 1999 in line with the fast-growing export demand. China, a small producer of sweet corn, and relatively a new market for CSC, continues to prefer U.S. canned sweet corn in 1998.|
Production of sweet corn for processing in the United States in calendar year 1998 is estimated at 2.9 million tons, down 3 percent from 1997, and 14 percent below the 1994 record crop. The decline was due to a 1 percent drop in contracted area harvested on 186,102 hectares (459,860 acres). U.S. production of canned sweet corn (csc) in 1998 is estimated at 1.4 million tons (568,000 tons, net weight), down 4 percent from 1997. Production of sweet corn for freezing in 1998 is estimated at 1.52 million tons (411,000 tons, net weight) down 2 percent from the previous year. CSC accounts for the bulk of U.S. processed sweet corn exports. Exports of CSC from January to September 1998, were down 15 percent to 130,135 tons from the same period in 1997. During this period, Asian countries accounted for 60 percent of U.S. CSC exports. Because of the continuing Asian financial crisis, U.S. csc exports for 1998 are estimated at only 150,000 tons, and are forecast to remain at about the same level in 1999.
In Minnesota and Wisconsin, unfavorable weather during the growing season slowed crop maturity and reduced yields. Increased acreage and favorable weather in New York and Washington state helped boost production, helping offset reduced area and yields in other producing states. U.S. sweet corn production for key producing states are as follows:
Japan continues to be U.S. best customer for processed sweet corn exports
During the first 9 months of 1998, U.S. canned sweet corn exports totaled 130,135 tons, down 15 percent from for the same period in 1997, mostly due to the continuing Asian economic crisis. During this period, U.S. exports of canned sweet corn to Asia accounted for 61 percent of total sales, of which Japan accounted for 56 percent. With the exception of Taiwan, where sales were up, U.S. exports of canned sweet corn to all other major Asian markets were down significantly. U.S. exports to Hong Kong were down 73 percent to 4,000 tons, shipments to Korea dropped 60 percent to 6,000 tons, and exports to Japan were off 8 percent, compared to the same time period in 1997.
U.S. exports of frozen sweet corn during the first 9 months of 1998 faired better than canned sweet corn, totaling 55,671 tons, up 12 percent from the comparable period in 1997. U.S. exports to Asian countries during this period accounted for 70 percent of total U.S. frozen sweet corn exports.
Production of canned sweet corn in Thailand continued to rise in 1998, up 23 percent to 29,000 tons from 1997. Exports in 1998 accounted for 98 percent of Thailand's total production. Exports to the United States accounted for 37 percent of all shipments, with Germany a distant second with 9 percent. Other important markets included Japan, Canada, Australia and Hong Kong. Most Thai consumers still prefer fresh sweet corn to canned sweet corn, because of lower prices. Although the Thai government has reduced the tariff rate for canned sweet corn, the current rate of 30 percent ad valorem on C&F import value, plus a 10 percent VAT, still effectively limit imports. Thailand remains the world's largest exporter of canned baby corn.
Canned corn consumption in Thailand is limited mostly to large cities, where higher-income consumers can afford it, and supermarkets are available. Because of the higher incomes and gradual change in life style, domestic consumption is growing 5 to 10 percent per annum.
The Thai government provides no export subsidies for production and export of sweet corn products. Thai manufacturers of fresh and processed sweet corn are responsible for the promotion and sales of their own products (both canned and frozen).
Germany produces only negligible amounts of sweet corn, and acquires most of its supply from imports, primarily from France. In 1997, the French supplied 59 percent of the German canned sweet corn needs which totaled almost 56,000 tons, down 1 percent from the previous year. Other key suppliers during this period included Hungary (11 percent), the United States (10 percent), Thailand (9 percent) and Italy (7 percent). Germany's canned sweet corn imports from January-June 1998 totaled over 27,000 tons, with France accounting for the lion's share, 58 percent. During this period, imports from the United States dropped to fourth place behind Hungary and Thailand, with Italy fifth. A strong U.S. dollar was the primary factor for the U.S. loss of market share for the period.
Despite Japan's economic recession and weak yen, imports of canned sweet corn in 1997 grew 10 percent to 61,058 tons, with the U.S. accounting for 86 percent of total imports. Other smaller suppliers included New Zealand, Thailand, Canada and China. Frozen sweet corn imports also grew 8 percent during this period to 49,245 tons, with the U.S. share representing 80 percent of total imports. The U.S. share of the Japan's canned sweet corn imports during the first 7 months of 1998 totaled almost 36,000 tons, down 12 percent from the same time period in 1997. Although the U.S. continued to account for the lion's share, shipments from the United States were down 9 percent. Japanese imports of frozen sweet corn during the same period in 1998 totaled 28,587 tons, up 1 percent from the same period in 1997.
Hokkaido is Japan's largest producing region for canned sweet corn. In 1997, production is estimated at 25,000 tons, up 11 percent from the revised 1996 volume. Excellent weather and improved yields were the primary factors for the increase in sweet corn production in 1997. Planted area in 1997 totaled about 13,000 hectares. Of the 1997 canned sweet corn production, whole kernel-corn accounted for 70 percent, and cream-type corn accounted for the remainder.
Production of frozen sweet corn in Japan in 1997 is estimated at 9,417 tons (4,843 tons stemmed-corn and 4,574 tons kernel-corn), down 8 percent from 1996, due to declining consumer demand caused by Japan's economic recession. Traditionally, imports account for about 80 percent of Japan's total frozen sweet corn domestic needs.
Despite the product's well-developed history in Japan, all indications are that continued growth potential exists, drawing on strong consumer trends toward less time consuming, easy-to-cook products. Canned sweet corn fits well in this category and, therefore, can be successfully marketed to the growing numbers of working married couples and singles "on-the-go" with long commuting times and busy urban lifestyles.
Tariff rates for canned sweet corn imports into Japan are 10.8 percent without added sugar and 15.8 percent with added sugar. The tariff rate for imports of frozen sweet corn steamed or boiled into Japan in water is 11.2 percent and without added sugar is 9.2 percent.
Production of canned and frozen sweet corn in 1998 in France, the European Union's (EU) leading producer of processed sweet corn, is expected to remain at the 1997 levels. Adverse weather conditions which lowered yields ended the long-term upward production trend of past years. France is a net exporter of canned sweet corn. In marketing year 1997/98 (July-June), French exports of canned sweet corn totaled 92,134 tons, up 11 percent from the previous year. Germany accounted for 34 percent of the French canned sweet corn exports, followed by the United Kingdom with 21 percent and Spain with 14 percent. On the import side, in 1997/98 the U.S. was France's leading supplier of canned sweet corn, with a 37 percent market share. According to the U.S. Agricultural Counselor in Paris, market opportunities are growing as a result of decreasing import duties and increasing domestic demand.
Production of canned and frozen sweet corn in France in 1998 is estimated at 124,000 tons (net weight) and 21,000 tons, respectively, about the same as in 1997. Unfavorable weather conditions during the last month of harvest kept sweet corn yields close to the 1997 level. French production of canned and frozen sweet corn in 1997 was down from 1996 because of excessive rains during seeding of the crop in spring, low temperatures in June, and drought in September which lowered yields. More than 80 percent of the total area planted to sweet corn in France is located in the southwestern region of the country, Aquitaine.
In France, most sweet corn is consumed canned and cold--in salads, and mainly in summer. Most sweet corn consumers are young people. The bulk of canned sweet corn is purchased in supermarkets and packaged in metal cans of four different sizes; 140 grams, 280 grams, 560 grams and 1,680 grams. Only a small portion is sold in jars.
In France, the harvesting of sweet corn is from mid-July to early September. Most sweet corn producers also grow corn for animal feed, and therefore the same machinery and similar production techniques are used in production. The majority of sweet corn farms are irrigated.
There are approximately 1,900 producers of sweet corn in France, and seven canners including Ardovries, Avril, Bonduelle, Cirio, Daucy, Lomco, and Geant Vert. These processors work in collaboration with cooperatives and/or directly with groups of producers, such as UNIPROLEDI.
There are no import restrictions for canned sweet corn in France, but the product must be free of L. tryptophane amino acid. Labels for canned food products packed in liquid must indicate the net weight, as well as the drained weight in metric units.
Customs duties and levies for imports of sweet corn from third countries decrease by 6 percent each year as a result of the Uruguay Round Agreement. From July 1, 1997 to July 1, 1998, imports of canned and frozen sweet corn into France were subject to a custom duty of 6.6 percent ad valorem, plus specific levies amounting to 12.1 ECU's per 100 kilograms, net weight. From July 1,1998 to July 1, 1999, the customs duty will decrease to 6.1 percent and levies to 11.2 ECU's per 100 kilograms. By the year 2000, they will be reduced to 5.1 percent and 9.4 ECU's per 100 kilograms.
Although the late 1997 devaluation of the New Taiwan Dollar has had a negative impact on Taiwan's economy in general, canned sweet corn imports and consumption did not decline in 1997 relative to 1996, and consumption and imports are expected to increase in 1998. For the past 5 years, U.S. canned sweet corn has dominated Taiwan's sweet corn market with a market share of at least 98 percent. Based on Taiwanese trade statistics for the first half of 1998, U.S. canned sweet corn will continue to be the market leader in 1998, with a market share of about 98 percent. In 1997, Taiwan's canned sweet corn imports totaled 20,400 tons valued at US$22 million, with approximately 99 percent coming from the United States.
Production of sweet corn in Taiwan is primarily for fresh consumption. All canned sweet corn marketed and consumed in Taiwan is imported. Domestically produced sweet corn is not suitable for canning, but sold fresh mostly to grocery outlets and other vendors. In 1998, production of sweet corn is estimated at 33,200 tons, nearly the same as 1997 production which totaled 33,250 tons, up 3 percent from 1996.
Taiwan's imports of canned sweet corn from January to June 1998 totaled nearly 13,000 tons, with imports from the United States accounting for about 98 percent of the total. Other smaller suppliers of canned sweet corn include Germany, France and Thailand.
Approximately 75 percent of all sweet corn sales to Taiwan are marketed under the well known Green Giant brand name imported by Pillsbury. The number two brand, Bull Head, a Taiwan brand, imported by Haw Di Food Company, accounts for about a 10 percent market share. The remaining 15 percent of the market is being supplied by over 50 independent importers who tend to bring in lower quality product which is sold less than Green Giant and Bull Head brands. Competition from low-priced canned corn and other food substitutes has pushed the profit margin for canned sweet corn to a minimum. Given these conditions, new-to-market canned sweet corn exporters to Taiwan will have a difficult time establishing themselves in the market.
As a result of the bilateral World Trade Organization (WTO) accession negotiations between the United States and Taiwan, import tariffs for canned sweet corn were reduced 17.5 percent to 15 percent effective July 1998.
The United Kingdom is not a producer of canned sweet corn, although small amounts of fresh sweet corn are grown and consumed on the cob. The U.K. meets all of its domestic canned sweet corn needs with imports. France continued to dominate the U.K. market for canned sweet corn imports in 1997 totaling 22,346 tons or 49 percent of total imports. French canned sweet corn export dominance to the U.K. in 1998 is expected to continue, because of its close proximity to the U.K. and, as a EU member, French product is not subject to an import duty or levy. Other suppliers include the United States, Canada, Thailand and Italy. Imports of canned sweet corn from the United States fell slightly in 1997 to 7,800 tons from the previous year. According the U.S. Agricultural Counselor in London, U.S. product had trouble competing on price with French and Canadian canned sweet corn in 1997.
U.K.'s consumption of canned sweet corn in 1997 totaled 44,700 tons, up 4 percent from1996. This upward consumption trend is expected to continue through 1998. Over the next three to five years, U.S. canned sweet corn exports to the United Kingdom are expected to increase because of rising demand and the fact that the import duty and levy will continue to be decreased in accordance with the GATT agreement.
In 1998, canned sweet corn imports into the United Kingdom are estimated at 46,200 tons, up 2 percent from 1997. In 1997, France continued as the main supplier of canned sweet corn to the United Kingdom. Imports from the United States during the same period were down slightly, totaling 7,799 tons from 1996. U.S. exports of canned sweet corn to the U.K. will continue to face strong competition from other exporting countries, such as France and Canada.
Consumers in the United Kingdom prefer canned sweet corn over frozen sweet corn
U.K. consumer preference for canned sweet corn over frozen is mainly due to cheaper prices and smaller pack sizes. There is also significant growth in the demand for canned sweet corn in the food service industry. Distribution of canned sweet corn is divided between the food service industry and retail outlets, accounting for 30 percent and 70 percent, respectively. At the retail level, the market is led by own-label product, which is priced below its branded competition. The supermarkets seek to establish prices in advance and allow profit margins to fluctuate in response to changes in import/wholesale prices.
In 1998, imports of canned sweet corn from the United States are subject to an import duty of 6.1 percent, plus a variable charge of 11.2 ECU's per 100 kilograms, tariff code 2005800000.
According to the U.S. Agricultural Trade Officer in Guangzhou, canned sweet corn in China is relatively a new-to-market product. Because canned sweet corn production in China is limited, the government and food service industry association do not keep statistics on it. Imports account for the bulk of China's canned sweet corn consumption. Imports are estimated to have increased from about 500 tons in 1994 to 15,000 tons in 1997, valued at about US$15 million. China also imports frozen sweet corn, but the volume is not as large as the canned variety. The strongest demand for canned sweet corn in China has been largely concentrated in the country's economically better off cities, such as Beijing, Guangzhou, Shanghai and Shenzhen.
Canned sweet corn popularity in China has grown by leaps and bounds since the mid-1990's. Imports account for the bulk of China's canned sweet corn consumption. Most of China's canned sweet corn imports have been entering through unofficial channels. Imports have grown from 500 tons in 1994 to an estimated total of almost 15,000 tons in 1997. According to Hong Kong re-export statistics, over 13,000 tons of canned sweet corn were imported into China via Hong Kong during the first three quarters of 1997. The United States accounted for 40 percent of imports during this period, which totaled about 8,750 tons, valued at almost US $8.0 million. During this same period, Thailand's share of the trade greatly increased to over 4,000 tons valued at US$3.0 million (nearly one-third of total imports), up from only 279 tons imported the whole year in 1996. Over the last few years, China's exports of canned sweet corn have remained stable at about 1,000 tons, with Hong Kong and Japan being the primary destinations.
Distribution and Marketing
Canned sweet corn has increasingly become an ingredient in many Chinese dishes. Hotel, restaurants and consumers use canned sweet corn in many of their food preparation needs.
The majority of the canned sweet corn sold in China is whole kernel, but many brands also offer creamed-style sweet corn. In Chinese food preparation, creamed-style sweet corn is often used in soups.
Geographically, canned sweet corn in China is mainly sold in the three high-income areas of Beijing, Shanghai and Guangdong. In these cities, the major buyers of sweet corn have their own marketing offices and/or distributors. Reportedly, competition is the most intense in Guangdong due to the overall number of available brands.
The bulk of canned sweet corn in China is retailed in supermarkets, hypermarkets, and hotels/restaurants (the biggest purchasers). Like individual consumers, hotels and restaurants prefer purchasing medium-size cans ranging in sizes from 400 to 432 grams (14to 15 ounces, gross weight).
According to distributors and retailers, price is the most important factor that consumers consider when purchasing canned sweet corn. At supermarkets, medium-size cans of sweet corn retail for prices ranging from US$0.54 to $1.03 per piece. Most overseas brands dominate the Chinese canned sweet corn market, but a few domestic ones exist, too. Three most popular brands are American: Del Monte, S&W, and Jolly Green Giant/Pillsbury. All three of these brands can be found in China's principal domestic markets.
Fresh sweet corn exports revised
The U.S. Department of Commerce, Bureau of the Census has revised U.S. fresh sweet corn (HS 0709904500) export data in metric tons for 1997 for the months of March, April and May. The miscoded data under sweet corn exports for the 3 months has been transferred to yellow field corn (HS 1005902030):
For further information, contact Emanuel McNeil
at (202) 720-2083.