Malaysian Tariff
Reductions Expected to Boost U.S. Horticultural Exports:
Malaysia’s government included a proposal to abolish
import duties on 43 food categories and reduce duties on
136 more in its 2000 Budget, including many fresh and
processed fruits and vegetables. Most fresh fruit tariffs
will drop from 10 percent to 5 percent or zero, thus
helping to bring a needed boost to an important U.S.
horticultural export market that has struggled since the
Asian crisis. Malaysia is one of the top 25 largest U.S.
export markets for horticultural products, with total
shipments valued at an estimated $69 million in FY 1999.
The products that look to benefit the most from the 50 to
100 percent tariff reductions are fresh oranges, apples,
table grapes, grapefruit, and pears. U.S. orange and
apple exports both average approximately $10 million
yearly, while fresh grapes average $7 million.
Fruit Tree Virus Not Foreseen To
Have Adverse Implications On U.S. Stone Fruit Exports:
On October 13, 1999, APHIS confirmed the presence of the
plum pox virus (PPV) in Adams County, a stone fruit
growing region in the state of Pennsylvania. The virus,
which affects stone fruit species, mainly peaches,
apricots, and plums, has been identified as the PPV-D
strain. Cherries are not believed to be susceptible to
the D strain, which is present in most of Europe and
Chile. Fortunately, the situation is not expected to
seriously hamper U.S. fresh stone fruit exports, as PPV-D
is not transmitted by seeds. Therefore, fresh fruit is
not a pathway for this strain of the virus. However,
plant material from infected trees could spread the
virus. Therefore, Canada has imposed a ban on imports of
stone fruit nursery stock from the affected areas in
Pennsylvania. In 1998, U.S. stone fruit exports
(including cherries) totaled 178,722 tons, valued at $251
million. Peaches and nectarines account for about 45
percent of the volume of U.S. stone fruit exports,
followed by plums and prunes at about 30 percent.
However, cherries account for 50-percent of U.S. stone
fruit exports in value terms. Canada, Taiwan, and Mexico
are the major markets for U.S. stone fruits.
Mexico’s New Minimum Reference
Price For Apples Seen As Good News For U.S. Apple
Exporters: Under the terms of the antidumping
suspension agreement, Mexico’s Secretariat of
Commerce and Industrial Development (SECOFI) published on
October 26,1999, a final resolution on the minimum
reference price for imports of U.S. red and golden
delicious apples for the current season. The new minimum
reference price of $11.29 per 42-pound standard box is
lower than the $13.72 per box established last season
and, as such, is expected to have positive implications
on U.S. apple sales to Mexico. The new minimum price will
be in effect from November 1, 1999, to October 31, 2000.
Last season, the Pacific Northwest industry was concerned
about its apple sales to Mexico because the minimum
reference price of $13.72 per box established under the
terms of the agreement was much higher than actual U.S.
prices for red and golden delicious varieties. Despite
the high reference price, Mexico’s demand for U.S.
red and golden delicious apples was strong, mainly
because prices were even higher for major
competitors’ product and for domestically-grown
apples. As such, U.S. apple sales to Mexico in 1998/99
were the second largest on record with an increase of 90
percent to 119,528 metric tons, valued at $66 million.
EU Ministers Allow Chocolate Products to
Contain Other Vegetable Fats: On October 28, EU
Internal Market Ministers approved an agreement allowing
the use of 6 non-cocoa vegetable fats in the manufacture
of chocolate. This agreement will settle a dispute that
has raged for 25 years, but still may take another year
to complete. The Ministers endorsed the provisional
agreement reached in June 1999 to allow chocolate
products to contain 5 percent of vegetable oils as long
as the products are labeled. Six tropical oils (illipe,
palm, sal, shea, kokum gurgi, and mango kernel) could be
included in chocolate instead of cocoa butter. The
dispute began when the United Kingdom, Ireland, and
Denmark joined the EU in 1973 and were granted an
exemption from the ban on making chocolate only from
cocoa butter. African producing countries predict that EU
demand for cocoa beans could drop 200,000 tons; while
other analysts predict that existing chocolate products
would not change upon ratification of the agreement as
consumers are very much taste-oriented. In addition,
because some vegetable fats are more heat resistant, some
Nestle analysts predict an increase in sales, especially
to countries with higher temperatures.
